Asser International Sports Law BlogOur International Sports Law Diary <br/>The <a href="http://www.sportslaw.nl" target="_blank">Asser International Sports Law Centre</a> is part of the <a href="http://www.asser.nl/" target="_blank"><img src="/sportslaw/blog/media/logo_asser_horizontal.jpg" style="vertical-align: bottom; margin-left: 7px;width: 140px" alt="T.M.C. Asser Instituut" /></a>http://www.asser.nl/SportsLaw/Blog/
http://www.rssboard.org/rss-specificationBlogEngine.NET 2.9.1.0en-UShttp://www.asser.nl/SportsLaw/Blog/opml.axdhttp://www.dotnetblogengine.net/syndication.axdAsser International Sports Law CentreAsser International Sports Law Blog0.0000000.000000Statement on the European Commission's ISU Decision by Ben Van Rompuy and Antoine Duval<p align="justify"></p><p align="justify"><u><b>Editor's note</b></u>: We (Ben Van Rompuy and Antoine Duval) are at the origin of today's <a href="http://europa.eu/rapid/press-release_IP-17-5184_en.htm">decision</a> by the European Commission finding that the International Skating Union's eligibility rules are contrary to EU competition law. In 2014, we were both struck by the news that ISU threatened lifetime ban against speed skaters wishing to participate in the then projected Icederby competitions and convinced that it was running against the most fundamental principles of EU competition law. We got in touch with Mark and Niels and lodged on their behalf a complaint with the European Commission. Three years after we are pleased to see that the European Commission, and Commissioner Vestager in particular, fully embraced our arguments and we believe this decision will shift the tectonic structure of sports governance in favour of athletes for years to come. <br></p><p><br></p><u><b>Here is our official statement:</b></u><br><br><p align="justify">Today is a great day for Mark Tuitert and Niels Kerstholt, but more importantly for all European athletes. The European Commission did not only consider the International Skating Union's eligibility rules contrary to European law, it sent out a strong message to all international sports federations that the interests of those who are at the centre of sports, the athletes, should not be disregarded. This case was always about giving those that dedicate their lives to excelling in a sport a chance to compete and to earn a decent living. The majority of athletes are no superstars and struggle to make ends meet and it is for them that this decision can be a game-changer.</p><p align="justify">However, we want to stress that this case was never about threatening the International Skating Union’s role in regulating its sport. And we very much welcome the exceptional decision taken by the European Commission to refrain from imposing a fine which could have threatened the financial stability of the International Skating Union. The International Skating Union, and other sports federations, are reminded however that they cannot abuse their legitimate regulatory power to protect their economic interests to the detriment of the athletes.</p><p align="justify">We urge the International Skating Union to enter into negotiations with representatives of the skaters to devise eligibility rules which are respectful of the interests of both the athletes and their sport.</p><p align="justify">Since the summer of 2014, it has been our honour to stand alongside Mark and Niels in a 'David versus Goliath' like challenge to what we always perceived as an extreme injustice. In this fight, we were also decisively supported by the team of EU Athletes and its <a href="http://chancetocompete.com/an-open-letter-to-european-commissioner-for-competition-margrethe-vestager/"><i>Chance to Compete</i></a> campaign.</p><p align="justify">Finally, we wish to extend a special thank you to Commissioner Vestager. This case is a small one for the European Commission, but Commissioner Vestager understood from the beginning that small cases do matter to European citizens and that European competition law is there to provide a level playing for all, and we are extremely grateful for her vision.</p><p align="justify"><br></p><p align="justify">Dr. Ben Van Rompuy (Leiden University) and Dr. Antoine Duval (T.M.C. Asser Instituut)</p><p></p>http://www.asser.nl/SportsLaw/Blog/post/statement-on-the-european-commission-s-isu-decision-by-ben-van-rompuy-and-antoine-duval
http://www.asser.nl/SportsLaw/Blog/post/statement-on-the-european-commission-s-isu-decision-by-ben-van-rompuy-and-antoine-duval#commenthttp://www.asser.nl/SportsLaw/Blog/post.aspx?id=57138466-5591-41f6-b07e-7e84bc163d5dFri, 08 Dec 2017 16:12:00 +0100BlogInternational Sports Law CasesInternational Sports Law CommentariesAntoine Duvalhttp://www.asser.nl/SportsLaw/Blog/pingback.axdhttp://www.asser.nl/SportsLaw/Blog/post.aspx?id=57138466-5591-41f6-b07e-7e84bc163d5d1http://www.asser.nl/SportsLaw/Blog/trackback.axd?id=57138466-5591-41f6-b07e-7e84bc163d5dhttp://www.asser.nl/SportsLaw/Blog/post/statement-on-the-european-commission-s-isu-decision-by-ben-van-rompuy-and-antoine-duval#commenthttp://www.asser.nl/SportsLaw/Blog/syndication.axd?post=57138466-5591-41f6-b07e-7e84bc163d5dA Good Governance Approach to Stadium Subsidies in North America - By Ryan Gauthier
<p align="justify"><b>Editor's Note: </b><a href="https://www.tru.ca/law/faculty-staff/faculty/ryan-gauthier.html">Ryan Gauthier</a> is Assistant Professor at Thompson Rivers University in Canada. Ryan’s research addresses the governance of sports organisations, with a particular focus on international sports organisations. His PhD research examined the accountability of the International Olympic Committee for human rights violations caused by the organisation of the Olympic Games. <br><br><br></p>
<p class="MsoNormal" align="justify"><b><u>Publicly Financing a Stadium – Back in the Saddle(dome)</u></b></p>
<p class="MsoNormal" align="justify">Calgary, Canada, held their municipal elections on October 16, 2017, <a href="http://www.cbc.ca/news/canada/calgary/calgary-election-2017-results-victor-1.4357873">re-electing Naheed Nenshi for a third term as mayor</a>. What makes this local election an interesting issue for sports, and sports law, is the domination of the early days of the campaign by one issue – public funding for a new arena for the Calgary Flames. The Flames are Calgary’s National Hockey League (NHL) team, and they play in the Scotiabank Saddledome. <br></p>
<p class="MsoNormal" align="justify"><br><img src="http://www.asser.nl/SportsLaw/Blog/FILES%2f2017%2f12%2fRyan1.png.axdx"></p>
<p class="MsoNormal" align="justify">Scotiabank Saddledome, <a href="http://calgaryherald.com/news/local-news/dome-sweet-dome-calgarynext-leaves-saddledomes-fate-unknown">credit to Lorraine Hjalte, Calgary Herald</a></p>
<p class="MsoNormal" align="justify">The team began play in 1972 as the Atlanta Flames, moving to Calgary in 1980. The Saddledome was built in 1983 to support both the newly-arrived Flames, and Calgary’s 1988 Winter Olympic Games. Today, the Saddledome is the oldest arena in operation in the NHL. Due to its age, and the <a href="http://nationalpost.com/news/canada/inside-the-saddledome-photos-reveal-scale-of-the-damage-in-calgary-flames-flood-ravaged-home">damage caused by floods in 2013</a>, the Flames are looking for a new home. As is the norm in North America, the Flames have no intention of going it alone, but are seeking a deal with the City of Calgary where the city would subsidize part of the arena. Negotiations have been ongoing for several years, with <a href="http://www.cbc.ca/news/canada/calgary/calgary-council-plan-b-calgary-next-still-sleeping-1.4083787">a few possible sites discussed</a>.</p>
<p class="MsoNormal" align="justify">Shortly into the 2017 municipal election campaign, negotiations between Calgary and the Flames broke down. The <a href="http://www.cbc.ca/news/canada/calgary/calgary-city-council-flames-negotiations-deal-1.4291316">City of Calgary publicly released their proposal for a $555 million stadium</a>, where the city would effectively subsidize 33% of the stadium through a mix of funding, land, and demolition of the old Saddledome. The team would pay 33% of the costs, and the fans would kick in the final 33% through a ticket tax. The Flames responded by <a href="http://www.cbc.ca/news/canada/calgary/calgary-flames-arena-proposal-1.4300015">releasing their proposal for a $500 million stadium</a>, where the city would provide 45% of the funding through a ‘Community Revitalization Levy’ (a loan from the province of Alberta, paid off by property taxes on new developments around the arena), with the team providing 55% of the remainder. The difference in costs may be that the Flames’ proposal does not appear to consider the demolition of the old Saddledome. While the team’s proposal has the team paying more costs up-front, it would also see the Flames pay no property tax or rent during their tenure in the new stadium, while keeping all revenue generated by the arena.</p>
<p class="MsoNormal" align="justify">Canadian national media praised Mayor Nenshi for not simply capitulating to the demands of the Flames. Print media exhorted taxpayers to <a href="http://www.macleans.ca/opinion/the-calgary-flames-want-half-a-billion-dollars-from-taxpayers-just-say-no/">“Just say ‘No’”</a> to subsidizing the Flames, and called Nenshi’s re-election <a href="http://nationalpost.com/opinion/jen-gerson-neshis-re-election-a-win-for-every-city-blackmailed-by-a-sports-team">“a win for every city blackmailed by a sports team”</a>. The Calgary Flames, and the NHL were less sanguine, as NHL Commissioner <a href="http://calgaryherald.com/sports/hockey/nhl/calgary-flames/bettman-blames-nenshi-for-no-prospect-of-getting-new-flames-arena">Gary Bettman blamed Nenshi</a> for not getting a new arena for the Flames, and <a href="http://www.cbc.ca/news/canada/calgary/calgary-flames-arena-leave-nhl-analysis-1.4314106">Flames’ management suggesting that the team would have to move</a>. The night of Nenshi’s re-election saw the communications director of the Flames, Sean Kelso, take a more direct stance:</p>
<p class="MsoNormal" align="justify"><br><img src="http://www.asser.nl/SportsLaw/Blog/FILES%2f2017%2f12%2fRyan2.png.axdx"></p>
<p class="MsoNormal" align="justify">The ongoing dispute in Calgary is emblematic of a larger problem in North America – the public financing of stadiums for professional sports teams.</p>
<p class="MsoNormal" align="justify"><b><u>Public Financing of Stadiums in North America – A General Overview</u></b></p>
<p class="MsoNormal" align="justify">North American cities have subsidized stadiums for professional sports teams for decades. However, cities rarely simply transfer cash to a team. Instead, more complex mechanisms are used: issuing bonds, tax increases, lotteries, and the use of “eminent domain”.</p>
<p class="MsoNormal" align="justify">First, cities may provide money for stadiums through providing bonds to team owners. These bonds are tax-exempt, and are normally used by cities for public improvements. Cities have been able to justify their use for stadiums, and the tax-exempt nature of the bonds lowers the lifetime borrowing costs for a team. Second, cities may simply increase taxes. Cities used to increase property taxes to raise money for stadiums, but local residents began to resent such increases. Today, cities often increase “sin taxes” (e.g., on alcohol, or gambling), or taxes on hotels, in an attempt to move the burden of increased taxation to out-of-town people who won’t be voting in the next municipal election. Third, cities may set up lotteries, in conjunction with the state or province, to raise money for the stadium. Finally, cities may exercise their use of “eminent domain”. This tactic enables cities to condemn the land, with payment of just compensation (which is often not market value) to the original owner, for the furtherance of a “public purpose” (what constitutes a public purpose is broad, following the US Supreme Court decision in <a href="https://www.law.cornell.edu/supct/html/04-108.ZS.html"><i>Kelo v. City of New London</i>, 545 U.S. 469 (2005)</a>).</p>
<p class="MsoNormal" align="justify">After understanding the <i>what</i>, the question remains: <i>why</i> do cities subsidize sports stadiums? Ultimately, there is a limited supply of major-league teams, and cities view being a “major league” city as a benefit. Unlike European professional leagues, where any local team could make it to the top league through promotion, the top leagues in North America are closed leagues, currently limited to 30-32 teams in the “big four” leagues. Cities that want to be home to a professional team must convince a league to expand, placing a new team in their city (as Las Vegas recently did with the NHL), or convince an owner of an already-existing team to relocate (<a href="http://www.espn.com/nfl/story/_/id/19016323/raiders-move-las-vegas-approved-31-1">as Las Vegas has done with the National Football League’s Oakland Raiders</a>). One way to encourage expansion or relation is to offer a subsidized stadium. It can be argued that these tactics are no different than a city offering a subsidy to convince a company to establish or relocate an office – <a href="https://www.thestar.com/news/gta/2017/10/19/more-than-100-cities-have-put-forward-bids-for-amazons-hq2-here-are-the-craziest-ones.html">like what is happening with Amazon right now</a> – except for the scale of the subsidy.</p>
<p class="MsoNormal" align="justify">Boosters of stadium subsidies have argued that cities should be happy to have sports teams, as the teams will generate an economic boost. They claim that the team, and their new stadium, will increase local income, employment rates, property values, and the well-being of citizens. However, <a href="http://www.fieldofschemes.com/research/">economists have generally debunked these claims</a>. While there are examples of successful stadiums, they are generally not as successful as predicted, often not worth the costs, and the few successes are drowned out by every other instance where the economic impact was not realized (sort of like hosting the <a href="https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2990262">Olympic Games or FIFA World Cup</a>).</p>
<p class="MsoNormal" align="justify"><b><u>Proposed Legal Solutions to Halt Public Financing of Stadiums</u></b></p>
<p class="MsoNormal" align="justify">Given the lack of economic benefits generated by stadiums, particularly given the hundreds of millions of dollars of subsidies granted to each stadium, legal scholars have proposed legislative, regulatory, and judicial solutions to halting this gravy train.</p>
<p class="MsoNormal" align="justify">In regards to legislative solutions, Canada and the United States could follow the model of the European Union (EU). The EU has restrictions on government assistance to private industries, to prevent the distortion of competition across the EU – these are known as the “State Aid” rules, found in Art. 107 of the <i>Treaty on the Functioning of the European Union</i>. In practice, the EU has an uneven history of applying the <a href="http://www.asser.nl/SportsLaw/Blog/post/the-eu-state-aid-and-sport-saga-setting-the-scene">State Aid rules to sport</a>. However, it has shown more enthusiasm over the past year to find <a href="http://www.asser.nl/SportsLaw/Blog/post/the-eu-state-aid-and-sport-saga-the-showdown">evidence of state aid that is incompatible with the <i>Treaty</i></a>, including in a case that involved a <a href="http://www.asser.nl/SportsLaw/Blog/post/the-eu-state-aid-and-sport-saga-the-real-madrid-decision-part-2">questionable deal involving land next to Real Madrid’s Bernabéu Stadium</a>. However, legislative solutions are unlikely to be enacted by either the American Congress or the Canadian Parliament (or local legislative bodies). There appears to be no interest to do so, and why would there be? Politicians can benefit from new stadiums by working with business elites who support the stadiums, and the evidence of repercussions at the ballot box appear to be mixed.</p>
<p class="MsoNormal" align="justify">Some legal scholars have suggested regulatory or judicial solutions, such as: <a href="http://scholarship.richmond.edu/pilr/vol20/iss1/6/">halting the tax-free status of municipal bonds, ending the use of eminent domain to obtain land for stadiums, and advocated a stronger role for antitrust oversight over the conduct of teams and leagues in this regard</a>. However, courts have construed these particular laws broadly enough to allow the public financing of stadiums to continue.</p>
<p class="MsoNormal" align="justify"><b><u>A Good Governance Approach to the Public Financing of Stadiums – Atlanta Braves Case Study</u></b></p>
<p class="MsoNormal" align="justify">When even Calgary’s stance, which had the city subsidizing at least 1/3 of the stadium, is considered brave, it seems reasonable to presume that publicly-subsidized stadiums will continue apace in North America. As such, it may be more helpful to consider what happens after a stadium project is proposed. Applying a good governance approach to stadium financing could be a helpful way forward. If stadiums are going to be built, regardless, then it is best to make those who build stadiums – governments and teams – accountable to the taxpayers and fans.</p>
<p class="MsoNormal" align="justify">Good governance principles have been increasingly applied to the organization of sport – particularly the <a href="http://playthegame.org/">governance of international sporting organisations</a>. While good governance can be defined in a myriad of ways, it is often broken down to particular principles. In examining stadium projects, I suggest that four principles should be considered: transparency, public participation, solidarity, and review. These principles closely track those used by the <a href="http://playthegame.org/knowledge-bank/publications/sports-governance-observer-2015-the-legitimacy-crisis-in-international-sports-governance/6f53dabb-92fa-4f77-9d0a-a58300dd1195">Sports Governance Observer</a>.</p>
<p class="MsoNormal" align="justify">One recent stadium project seems to have studiously avoided all of these principles entirely – in a way that demonstrates the need for these principles to be applied in the first place. This project took place in the Calgary Flames’ old home of Atlanta, USA.</p>
<p class="MsoNormal" align="justify"><br><img src="http://www.asser.nl/SportsLaw/Blog/FILES%2f2017%2f12%2fRyan3.png.axdx"></p>
<p class="MsoNormal" align="justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Turner Field, <a href="https://en.wikipedia.org/wiki/Turner_Field#/media/File:Turner_Field_2013.jpg">credit to Zpb52</a></p>
<p class="MsoNormal" align="justify">In 2013, the Atlanta Braves announced that they were leaving their current stadium in downtown Atlanta. They weren’t moving to a new city, but were moving 32 kilometres north to the suburb of Cobb County. The reason for the move? A brand new, publicly-financed stadium. The Atlanta Braves had played at Turner Field since 1997. Not even twenty years later, the stadium, originally built as the centrepiece of the 1996 Summer Olympic Games, was deemed to be obsolete by the Braves. Enter Cobb County. To pay for a new stadium for the Braves, Cobb County issued <a href="http://www.myajc.com/news/cobb-approves-major-braves-stadium-agreements/VlgOPijPkz6hyKurCvZ9dL/">$368 million in municipal bonds</a> (originally <a href="http://www.ajc.com/news/local-govt--politics/cobb-county-paying-300-million-toward-braves-new-stadium/VqUcnrq3Kksh1cUoh3NnRP/">estimated at $276 million</a>). The Braves, in chasing public money, bucked <a href="https://deadspin.com/chart-how-the-braves-atlanta-exodus-compares-to-other-1462494338">the trend of teams moving <i>closer</i> to the city centre</a>, as <a href="https://deadspin.com/chart-how-the-braves-atlanta-exodus-compares-to-other-1462494338">suburbs are not conducive to stadiums</a>.</p>
<p class="MsoNormal" align="justify">While the rationale and the dollar figure should raise some eyebrows, the process used to secure funding for the stadium should be deeply disturbing to fans of democratic processes. The deal itself was negotiated in secret between a single Cobb County commissioner, and the Atlanta Braves. The president of the Atlanta Braves, John Schuerholz, stated that if news of the deal <a href="http://www.11alive.com/sports/mlb/atlanta-braves/braves-president-cobb-deal-had-to-be-kept-under-wraps/253151902">“had leaked out, this deal would not have gotten done…If it had gotten out, more people would have started taking the position of, ‘We don’t want that to happen. We want to see how viable this was going to be.’”</a> Eventually, the deal needed to be voted on by Cobb County commissioners. At the public vote held in May 2014, only twelve speaking slots were available to the public. Stadium supporters had lined up by 2pm for the 7pm meeting, and the Commissioners <a href="http://www.myajc.com/news/cobb-approves-major-braves-stadium-agreements/VlgOPijPkz6hyKurCvZ9dL/">denied any additional speaking slots.</a> The same Commissioners voted 5-0 to fund the stadium. Opponents of the stadium filed a suit in the Georgia courts, alleging that the bonds used to finance the new stadium violated the Georgia state constitution, and various state laws. However, the opponents were defeated in the courthouse, too, as the <a href="https://law.justia.com/cases/georgia/supreme-court/2015/s15a0277.html">Georgia Supreme Court upheld the validity of the bonds</a> as they provided at least some plausible public benefit. The stadium opened in 2017 to positive reviews from fans and <a href="https://www.baseballamerica.com/business/beyond-gates-atlanta-braves-new-ballpark-modern-touches-surrounds-suntrust-park-makes-stand/">ballpark enthusiasts</a>.</p>
<p class="MsoNormal" align="justify">In examining the Atlanta Braves new ballpark by applying principles of good governance, the results are discouraging. Transparency was almost non-existent throughout most of the process, as the deal was completed in secret, as admitted by the president of the team. Public participation was curtailed throughout the process, and most galling, at the eve of the final vote on the funding. There have been no solidarity benefits that have come to the forefront, although it should be noted that it <a href="https://sports.vice.com/en_us/article/qkyk3v/cobb-county-and-the-braves-worst-sports-stadium-deal-ever">is possible that money that was raised to pay for public parks was diverted to funding the stadium</a>, which cuts against the idea of solidary benefits. Finally, there will likely be no <i>post facto</i> review of the stadium and any attendant benefits it may claim. While there was review of the deal itself through the courts, the Georgia Supreme Court noted that <a href="https://law.justia.com/cases/georgia/supreme-court/2015/s15a0277.html">“we do not discount the concerns Appellants have raised about the wisdom of the stadium project and the commitments Cobb County has made to entice the Braves to move there. But those concerns lie predominantly in the realm of public policy….”</a>.</p>
<p class="MsoNormal" align="justify"><br><img src="http://www.asser.nl/SportsLaw/Blog/FILES%2f2017%2f12%2fRyan4.png.axdx"></p>
<p class="MsoNormal" align="justify">SunTrust Field, <a href="http://www.ctvnews.ca/sports/game-changer-a-look-at-the-atlanta-braves-new-ballpark-1.3346178">Credit to David Goldman/AP</a></p>
<p class="MsoNormal" align="justify"><b><u>The Value of Good Governance Principles in the Stadium Debate</u></b></p>
<p class="MsoNormal" align="justify">The case of Atlanta demonstrates the importance of good governance in the public financing of stadiums. Proponents, critics, and scholars can apply these principles to evaluate and engage in more thoughtful debates over the processes of public financing of stadiums. Since stadiums are likely to receive public funding, regardless of the merits, a better process should improve the benefits to the public, while constraining the costs.</p>
<p class="MsoNormal" align="justify">Applying principles, as opposed to enacting legislation, may lead the reader to ask “can these principles be enforced?” In terms of traditional legal enforcement, namely recourse to a regulatory body or a court, a city would probably need to implement these terms into a Memorandum of Understanding with the team. For principles such as solidarity, particulars could be written into the final funding agreement. This has been done, for example, with the <a href="https://www.edmonton.ca/attractions_events/documents/PDF/Arena_Master_Agreement.pdf">Community Benefits Agreement implemented between the City of Edmonton, and the Edmonton Oilers hockey team</a>, for a publicly-subsidized stadium that opened in 2016.</p>
<p class="MsoNormal" align="justify">However, even if the city itself refuses to implement these principles, they do provide a framework to hold decision-makers to account. In instances where the government has done wrong by the citizens, but there are no judicial remedies, the remedy <a href="https://www.canlii.org/en/sk/skca/doc/1999/1999canlii12234/1999canlii12234.html#par36">is then to vote the government out</a>. In establishing these principles, they then provide standards by which the government can be held to account, if not formally, then at least through the ballot box.</p>
<br>http://www.asser.nl/SportsLaw/Blog/post/a-good-governance-approach-to-stadium-subsidies-in-north-america-by-ryan-gauthier
http://www.asser.nl/SportsLaw/Blog/post/a-good-governance-approach-to-stadium-subsidies-in-north-america-by-ryan-gauthier#commenthttp://www.asser.nl/SportsLaw/Blog/post.aspx?id=888e934e-7d7a-4399-83de-7a5675509a6bTue, 05 Dec 2017 01:12:00 +0100BlogInternational Sports Law CasesInternational Sports Law CommentariesAntoine Duvalhttp://www.asser.nl/SportsLaw/Blog/pingback.axdhttp://www.asser.nl/SportsLaw/Blog/post.aspx?id=888e934e-7d7a-4399-83de-7a5675509a6b1http://www.asser.nl/SportsLaw/Blog/trackback.axd?id=888e934e-7d7a-4399-83de-7a5675509a6bhttp://www.asser.nl/SportsLaw/Blog/post/a-good-governance-approach-to-stadium-subsidies-in-north-america-by-ryan-gauthier#commenthttp://www.asser.nl/SportsLaw/Blog/syndication.axd?post=888e934e-7d7a-4399-83de-7a5675509a6bIllegally obtained evidence in match-fixing cases: The Turkish perspective - By Oytun Azkanar
<p class="MsoNormal" align="justify"><b>Editor’s Note</b>: Oytun
Azkanar holds an LLB degree from Anadolu University in Turkey and an LLM degree
from the University of Melbourne. He is currently
studying Sports Management at the Anadolu University.
</p><p class="MsoNormal" align="justify"><b>&nbsp;</b></p>
<p class="MsoNormal" align="justify"><b>Introduction</b></p>
<p class="MsoNormal" align="justify">On 19
October 2017, the Turkish Professional Football Disciplinary Committee (<b><i>Disciplinary
Committee</i></b>) rendered an extraordinary decision regarding the fixing of the
game between Manisaspor and Şanlıurfaspor played on 14 May 2017. The case
concerned an alleged match-fixing agreement between Elyasa Süme (former
Gaziantepspor player), İsmail Haktan Odabaşı and Gökhan Sazdağı (Manisaspor
players). <a href="http://www.tff.org/default.aspx?pageID=246&amp;ftxtID=28104">The Disciplinary Committee
acknowledged</a> that the evidence
relevant for proving the match-fixing allegations was obtained illegally and therefore
inadmissible, and the remaining evidence was not sufficient to establish that the game
was fixed. Before discussing the allegations, it is important to note that the
decision is not only significant for Turkish football but is also crucial to the
distinction between disciplinary and criminal proceedings in sports. </p>
<p class="MsoNormal" align="justify"><b>Background of the Case </b></p>
<p class="MsoNormal" align="justify">During
the last weeks of the 2016/2017 season in Turkish 2<sup>nd</sup> Division
League, three teams, namely Manisaspor, Şanlıurfaspor and Gazişehir Gaziantep,
were competing to avoid relegation. At the penultimate week, Manisaspor played
against Şanlıurfaspor and won the game. Gazişehir Gaziantep also won its match.
As a consequence of these results, Şanlıurfaspor was relegated to a lower
division. At the end of the season, on 5 July 2017, Şanlıurfaspor <a href="http://www.sporx.com/sanliurfasporun-sike-iddiasi-SXHBQ641112SXQ">claimed</a> that
the club Gazişehir Gaziantep had attempted to influence the outcomes of the
games and Şanlıurfaspor appealed to the Turkish Football Federation (<b><i>TFF</i></b>).
</p>
<p class="MsoNormal" align="justify">Şanlıurfaspor’s
<a href="http://www.sporx.com/sanliurfasporun-sike-iddiasi-SXHBQ641112SXQ">claims</a>
mainly focused on the recording of the talk between Nizamettin Keremoğlu (Vice-President
of Gazişehir), Elyasa Süme (a former Gaziantepspor player), Gökhan Sazdağı
(Gazişehir player who was on loan at Manisaspor at the time) and İsmail Haktan
Odabaşı (Manisaspor player). The recording was leaked and uploaded on <a href="https://www.youtube.com/watch?v=quMakThJyy0">Youtube</a>. The content of
the recording clearly demonstrates that incentives were provided to Manisaspor
players by Gazişehir in order to encourage them to win against Şanlıurfaspor.
Furthermore, Gökhan Sazdağı confessed in the recording that he had been involved
in match-fixing before and that this would not be his first time. In addition, Gaziantepspor <a href="http://www.milliyet.com.tr/gaziantepspor-dan-elyasa-sume-ye---2482354-skorerhaber/">claimed</a> that
Elyasa Süme was involved in match-fixing. On 20 July 2017, based on these
serious allegations and the incriminating evidence
publically released, the TFF <a href="http://www.haberturk.com/spor/futbol/haber/1562745-tff-sike-basvurusu-etik-kurulu-na-sevk-edildi">referred</a> Şanlıurfaspor’s
application to the Turkish Football Federation Ethics Committee (<b><i>Ethics Committee</i></b>). Following the Ethics
Committee’s report, the TFF subsequently referred the case to the Disciplinary
Committee for determining the possible sanctions to be imposed on Gazişehir
Gaziantep, Nizmettin Keremoğlu, Elyasa Süme, Gökhan Sazdağı and İsmail Haktan
Odabaşı. Finally, on 19 October 2017, the Disciplinary Committee <a href="http://www.tff.org/default.aspx?pageID=246&amp;ftxtID=28104">decided</a> that
the evidence relevant for proving match-fixing
was illegally obtained and the remaining evidence was
not enough to establish an instance of match-fixing.</p>
<p class="MsoNormal" align="justify"><b>Separating Disciplinary and Criminal Proceedings</b></p>
<p class="MsoNormal" align="justify">It is
generally accepted that in sports law disciplinary proceedings are to be
treated differently than criminal investigations.<a href="#References">[1]</a> In countries
like Turkey, match-fixing and/or match-fixing attempts also constitute a crime.
Article 11(1) of the Act on the Prevention of Violence and Disorder in Sports stipulates
that a person providing advantages or benefits in order to influence the final
result of a game shall be punished with imprisonment from five to twelve years.
Article 11(5) of the same regulation also states that in case of commission of
the offense by offering or promising incentive pay with the intention of
enabling one team to win a match, only half of the punishment is to be imposed.</p>
<p class="MsoNormal" align="justify">On the
other hand, match-fixing and incentives also appear in Article 58 of the
Turkish Football Disciplinary Instruction. The said provision makes clear that
it is forbidden to influence the outcome of the games illegally or unethically.
Incentives fall also within the scope of this provision. In case of a breach,
individuals will face a life-long ban. In case of an attempt at match-fixing or
of the provision of unlawful incentives, clubs will be sanctioned by at least a
12 points deduction. </p>
<p class="MsoNormal" align="justify">It is
important to note that Turkish prosecutors have not yet opened a criminal investigation
for the allegations related to the provision of incentives, even if the
allegations and evidence are serious. </p>
<p class="MsoNormal" align="justify"><b>The Position of FIFA, UEFA,
and CAS with respect to Match-Fixing Allegations and Binding Rules for Turkish
Authorities&nbsp; &nbsp;&nbsp;&nbsp;</b></p>
<p class="MsoNormal" align="justify">FIFA
as the world's governing body of football has put in place significant
provisions regarding match-fixing and corruption in football. Article 69 <a href="http://www.fifa.com/mm/Document/AFFederation/Administration/50/02/75/DisCoInhalte.pdf">FIFA Disciplinary Code</a> stipulates
that anyone who unlawfully influences the outcomes of football games can be banned
from taking part in any football-related activity for life. Furthermore, Article
3.10 <a href="http://www.fifa.com/mm/document/affederation/footballgovernance/01/66/54/32/fifacodeofconduct.pdf">FIFA Code of Conduct</a> also highlights
the importance of zero tolerance for bribery and corruption.&nbsp;&nbsp; </p>
<p class="MsoNormal" align="justify">UEFA
president Michael Platini <a href="http://www.uefa.com/insideuefa/about-uefa/organisation/congress/news/newsid=1610722.html">announced</a> in
2011 that a zero tolerance policy was adopted by UEFA regarding match-fixing, and
that all match-fixing allegations would be seriously investigated. Moreover, as
evidenced in <a href="http://www.centrostudisport.it/PDF/TAS_CAS_ULTIMO/9.pdf"><i>Sport</i><i> Lisboa e Benfica Futebol SAD,
Vitoria Sport Clube de Guimaraes v. UEFA
and FC Porto Futebol SAD</i></a><i>,</i> UEFA is not bound by national associations’ decisions
in this regard. </p>
<p class="MsoNormal" align="justify">A zero-tolerance
policy requires that match-fixing attempts be punished heavily. This does not
mean, however, that there is no standard of proof for match-fixing allegations.
According to the CAS, match-fixing allegations must be proved to its comfortable
satisfaction. <a href="#Reference">[2]</a>
Comfortable satisfaction is <a href="http://www.centrostudisport.it/PDF/TAS_CAS_ULTIMO/35.pdf">defined</a> by the
CAS as a standard that is higher than the civil standard of “balance of
probability” but lower than the criminal standard of “proof beyond a reasonable
doubt”.<a href="#References">[3]</a> In my
view, considering the evidence in the
case of Şanlıurfaspor, in particular the recordings and the statements of the clubs, it should be accepted
that the standard of proof for match-fixing
allegations was met. </p>
<p class="MsoNormal" align="justify">What
is crucial in our case is that UEFA and the CAS cannot intervene in the Turkish
match-fixing proceedings due to Article 64(1) of the Statutes of the Turkish
Football Federation stating that “CAS shall not, however, hear appeals on
violation of the laws of the game, suspensions according to relevant provisions
of the FIFA and UEFA Statutes, or decisions passed by the independent and duly
constituted Arbitration Committee of the TFF”. Moreover, Article 59(3) of the <a href="https://global.tbmm.gov.tr/docs/constitution_en.pdf">Turkish Constitution</a> provides
that “the decisions of sports federations
relating to administration and discipline of sporting activities may be
challenged only through compulsory arbitration. The decisions of the
Arbitration Board are final and shall not be appealed to any judicial authority”.
On the other hand, in case of a breach, FIFA has the authority, relying on its
Code of Conduct and Disciplinary Code, to take important steps in order to
sanction clubs and/or individuals, even where national federations fail to do
so. Therefore, on 25 October 2017, Şanlıurfaspor <a href="https://www.haberler.com/sanliurfaspor-un-sike-iddiasi-10169958-haberi/">declared</a> that
if the Arbitration Board of the TFF did
not sanction clubs and individuals who were allegedly involved in match-fixing,
it would apply to FIFA to do so. </p>
<p class="MsoNormal" align="justify"><b>The Validity of Evidence</b></p>
<p class="MsoNormal" align="justify">The main
reason why the Disciplinary Committee did not find the clubs and individuals guilty
of match-fixing was that the evidence,
which was crucial to support the
allegations, was obtained illegally.<b> </b>Therefore,
it is of primary importance to compare this position to the one adopted by
UEFA, CAS, and the Swiss Federal Tribunal
with respect to the validity of illegally
obtained evidence in disciplinary
proceedings involving match-fixing.</p>
<p class="MsoNormal" align="justify">UEFA’s
position regarding the admissibility of evidence
can be derived from specific provisions in its regulations. For instance, Article
4(2) <a href="http://www.uefa.com/MultimediaFiles/Download/Regulations/uefaorg/Regulations/02/46/71/38/2467138_DOWNLOAD.pdf">2017/2018 UEFA Champions League
Regulations</a> expressly states that if UEFA is comfortably satisfied
that a club was involved in any activity aimed at arranging or influencing the
outcome of a match, such club will be ineligible for the participation. While
taking its decision, UEFA can rely on the decision of a national or international
sporting body, but it is not bound by these decisions. Article 4(2) allows UEFA
to punish clubs, even if they have been exonerated by other sporting bodies.
Therefore, it can be concluded that if UEFA is comfortably satisfied, the
validity of evidence will not be questioned. The article says nothing about the
validity of evidence. In addition, even if national sports governing bodies do
not punish clubs and/or individuals, UEFA is not bound by national decisions
even if the evidence was illegally obtained. <a href="#References">[4]</a></p>
<p class="MsoNormal" align="justify">The CAS
also supports the approach of UEFA with regard to the admissibility of evidence
in match-fixing cases. According to the <a href="https://jurisprudence.tas-cas.org/Shared%20Documents/3297.pdf">CAS jurisprudence</a>,
“even if evidence might not be admissible in a civil or criminal court in
Switzerland, this does not automatically prevent a sports federation or an arbitration tribunal from taking such
evidence into account in its deliberations”.<a href="#References">[5]</a> This statement
clearly shows that the CAS distinguishes criminal or civil court proceedings
from disciplinary proceedings. As a matter of fact, it can be argued that the CAS
allows national sports governing bodies to evaluate the admissibility of
match-fixing evidence less strictly than in
criminal proceedings. </p>
<p class="MsoNormal" align="justify">In
general, the CAS is bound by Swiss law because it is domiciled in Switzerland.
Therefore, the Swiss Federal Tribunal may annul the CAS awards if they are
contrary to Swiss public policy. One could argue that a decision based on
illegally obtained evidence violates
Swiss public policy. Thus, the approach of the Swiss Federal Tribunal also
needs to be taken into account. The Swiss Federal Tribunal discussed the
admissibility of evidence in <a href="http://www.swissarbitrationdecisions.com/sites/default/files/27%20mars%202014%204A%20448%202013.pdf"><i>A. v The Football Federation of Ukraine</i></a>. In
this case, the appellant claimed that using illegally obtained evidence, violated Swiss public policy. As a
response to this claim, the respondent (CAS) argued that there was an
overriding public interest in preserving football’s integrity. Therefore, the evidence should have been admissible according
to the CAS. The Swiss Federal Tribunal held that pursuant to Article 152(2) Swiss
Private International Law Act <a href="https://www.nkf.ch/wAssets-nkf2/docs/publikationen/andras_a_gurovits/AAG_Admissibility-of-Illegally-Procured-CAS-Proceedings.pdf">(PILA)</a>,
“illegally obtained evidence shall be considered only if there is an overriding
interest in finding the truth”. In that particular case, the Swiss Federal
Tribunal upheld the decision of the CAS and stated that if necessary to prove
an instance of match-fixing, illegally obtained evidence
was not inadmissible.</p>
<p class="MsoNormal" align="justify"><b>The Approach of Turkish Law against Match-Fixing</b></p>
<p class="MsoNormal" align="justify">As explained
above, the Act on the Prevention of Violence and Disorder in Sports and the Turkish
Football Disciplinary Instruction contain significant provisions aimed at
combating match-fixing. However, these rules say nothing about the
admissibility of evidence. Pursuant to Article 38(6) <a href="https://global.tbmm.gov.tr/docs/constitution_en.pdf">Turkish Constitution</a>,
“findings obtained through illegal methods shall not be considered evidence”.
Contrary to the PILA, the Turkish Constitution does not provide for exemptions.
Additionally, Article 206(2) and 217(2) <a href="https://www.unodc.org/res/cld/document/tur/2005/turkish_criminal_procedure_code_html/2014_Criminal_Procedure_Code.pdf">Turkish Criminal Procedure Code</a>
provide that illegally obtained evidence cannot be accepted by criminal courts in
Turkey. Nevertheless, there is no definitive verdict about the admissibility of
evidence in sporting disciplinary
proceedings in Turkey. Furthermore, Turkish sports regulations do not contain
specific rules for assessing the evidence
in match-fixing allegations. Therefore, it can be argued that in Turkey, there
is a loophole in disciplinary proceedings as to whether illegally obtained evidence is
admissible or not. </p>
<p class="MsoNormal" align="justify"><b>Conclusion</b></p>
<p class="MsoNormal" align="justify">The fight against match-fixing is vital for sports governing bodies. This
article has demonstrated that UEFA, CAS, and the Swiss Federal Tribunal share
the same view that illegally obtained evidence is not always inadmissible when
used to evidence an instance of match-fixing. In my view, the Disciplinary
Committee disregarded the approach of
UEFA, CAS, and the Swiss Federal Tribunal,
and instead followed the practice of the Turkish Criminal Court. Because
match-fixing is also a breach of the Turkish Act on the Prevention of Violence
and Disorder in Sports, it is the duty of criminal courts in Turkey to assess whether
the evidence was obtained legally or not. However, as a disciplinary body, the
Disciplinary Committee was not forced to deny the admissibility of illegally
obtained evidence. I believe it should have followed the established practices
of UEFA, FIFA, and the CAS, and assess the available evidence to determine whether
it met the comfortable satisfaction standard of proof. Hence, based on the
confession recorded in the YouTube video, the Disciplinary Committee should
have decided that the individuals concerned, at a minimum, attempted to fix the
match and it should have imposed the corresponding sanctions. &nbsp;&nbsp;</p>
<p class="MsoNormal" align="justify">___________________________</p>
<p class="MsoNormal" align="justify"><a name="References">[1] Adam Lewis and Jonathan Taylor, <i>Sport: Law and
Practice</i> (Bloomsbury, 3rd ed, 2014) 249.</a></p>
<p class="MsoNormal" align="justify"><a name="Reference">[2] Michael J
Beloff et al, <i>Sports Law</i> (Hart Publishing, Second edition, 2012) 188.</a></p>
<p class="MsoNormal" align="justify">[3] <i>Beşiktaş Jimnastik Kulübü v UEFA</i> [2013]
CAS 2013/A/3258 [119].</p>
<p class="MsoNormal" align="justify">[4] <i>Public Joint-Stock Company “Football Club
Metalist” v. Union des Associations Européennes de Football (UEFA) &amp; PAOK
FC</i> [2013] CAS 2013/A/3297 [8.8].</p>
<p class="MsoNormal" align="justify">[5] <i>Public Joint-Stock Company “Football Club
Metalist” v. Union des Associations Européennes de Football (UEFA) &amp; PAOK
FC</i> [2013] CAS 2013/A/3297 [2].</p>
<p class="MsoNormal" align="justify">&nbsp;</p>
http://www.asser.nl/SportsLaw/Blog/post/illegally-obtained-evidence-in-match-fixing-cases-the-turkish-perspective-by-oytun-azkanar
http://www.asser.nl/SportsLaw/Blog/post/illegally-obtained-evidence-in-match-fixing-cases-the-turkish-perspective-by-oytun-azkanar#commenthttp://www.asser.nl/SportsLaw/Blog/post.aspx?id=afd971d4-14b5-40b9-903e-ee977f207c24Mon, 27 Nov 2017 17:11:00 +0100BlogInternational Sports Law CasesInternational Sports Law CommentariesAntoine Duvalhttp://www.asser.nl/SportsLaw/Blog/pingback.axdhttp://www.asser.nl/SportsLaw/Blog/post.aspx?id=afd971d4-14b5-40b9-903e-ee977f207c240http://www.asser.nl/SportsLaw/Blog/trackback.axd?id=afd971d4-14b5-40b9-903e-ee977f207c24http://www.asser.nl/SportsLaw/Blog/post/illegally-obtained-evidence-in-match-fixing-cases-the-turkish-perspective-by-oytun-azkanar#commenthttp://www.asser.nl/SportsLaw/Blog/syndication.axd?post=afd971d4-14b5-40b9-903e-ee977f207c24Report from the first ISLJ Annual International Sports Law Conference - 26-27 October at the T.M.C. Asser Instituut<p align="center">
</p><p class="MsoNormal" align="justify">Close to 100 participants from 37 different countries attended the first ISLJ Annual International Sports Law Conference that took place on 26-27 October 2017 in The Hague. The two-day programme featured panels on the FIFA transfer system, the labour rights and relations in sport, the protection of human rights in sport, EU law and sport, the Court of Arbitration for Sport, and the world anti-doping system. On top of that, a number of keynote speakers presented their views on contemporary topics and challenges in international sports law. This report provides a brief summary of the conference for both those who could not come and those who participated and would like to relive their time spent at the T.M.C. Asser Institute.</p><p class="MsoNormal"><br></p><p class="MsoNormal"><img src="http://www.asser.nl/SportsLaw/Blog/FILES%2f2017%2f11%2fConference.png.axdx" width="659" height="437"><br> </p><p class="MsoNormal">
</p><p class="MsoNormal"><b>Day 1</b></p>
<p class="MsoNormal"><i><u>Opening Keynote by Miguel Maduro</u></i></p>
<p class="MsoNormal" align="justify">The audience did not have to wait long for one of the highlights of the conference as Miguel Maduro, a former Chair of the FIFA Governance Committee, took the floor immediately after Johan Lindholm, an Editor-in-Chief of the International Sports Law Journal, and <a href="https://twitter.com/Ant1Duval">Antoine Duval</a>, the Head of the Asser International Sports Centre, had delivered their opening speeches. Drawing on his experience as a Chair of the FIFA Governance Committee, Miguel identified the resistance to public scrutiny, accountability and transparency as root causes of the governance crisis currently faced by FIFA. He suggested that an independent international agency be established to supervise the governance of international sports governing bodies. According to him, only the European Union is capable of taking such an initiative.</p>
<p align="center">
</p><p align="center"><iframe src="https://www.youtube.com/embed/i7pFPkFR8AQ" allowfullscreen="" gesture="media" width="560" height="315" frameborder="0"></iframe>&nbsp; <br></p><p>
</p>
<p class="MsoNormal"><i><u>Panel Sessions</u></i></p>
<p class="MsoNormal" align="justify">The first panel, chaired by <a href="http://www.jus.umu.se/om-institutionen/personal/lindholm_johan/">Johan Lindholm</a>, revolved around the FIFA transfer system. <a href="https://twitter.com/JKL__84">Jakub Laskowski</a> from Legia Warszawa explained why we might need a different approach to solidarity in professional football. <a href="https://twitter.com/ewdrywood">Eleanor Drywood</a> from the University of Liverpool then examined the FIFA's ban on the international transfer of minors, suggesting that international sports governing bodies in general, and FIFA in particular, should take account of the <a href="https://treaties.un.org/pages/viewdetails.aspx?src=ind&amp;mtdsg_no=iv-11&amp;chapter=4&amp;clang=_en">United Nations Convention on the Rights of the Child</a> in order to enhance the protection of minors in sport. Finally, <a href="https://www.linkedin.com/in/william-mcauliffe-65b60123/">William McAuliffe</a>, a sports lawyer practising in Switzerland, spoke about buy-out clauses and the club's consent to transfer under the <a href="http://resources.fifa.com/mm/document/affederation/administration/02/70/95/52/regulationsonthestatusandtransferofplayersnov2016weben_neutral.pdf">FIFA Regulations on the Status and Transfer of Players</a>.</p>
<p class="MsoNormal" align="justify">The afternoon session started with a panel on the labour rights and relations in sport chaired by Professor <a href="https://www.edgehill.ac.uk/law/about/staff/professor-richard-parrish/">Richard Parrish</a> from Edge Hill University. <a href="https://www.linkedin.com/in/jack-withaar-098a8710/">Jack Withaar</a> from Tilburg University focused on employment contracts in professional sport, concluding with the question whether international sports federations should take into consideration labour standards elaborated by the International Labour Organization. Thereafter, <a href="https://www.linkedin.com/in/matt-graham-57790458/">Matthew Graham</a> from the World Players Association shared his insights on the functioning of international players' unions. Finally, <a href="https://twitter.com/Andrea_Cattane0">Andrea Cattaneo</a> from Edge Hill University encouraged a greater use of social dialogue to regulate professional football.</p>
<p class="MsoNormal" align="justify">The last panel of the day, chaired by Professor <a href="https://twitter.com/prof_mark_james">Mark James</a> from Manchester Metropolitan University, tackled a relatively new topic in international sports law – the protection of human rights. Whereas our research intern <a href="https://twitter.com/TomasGrell">Tomáš Grell</a> and <a href="https://twitter.com/DanielaHeerdt">Daniela Heerdt</a> from Tilburg University discussed how human rights could be affected by the organisation of a mega-sporting event, <a href="https://twitter.com/BrendanSchwab">Brendan Schwab</a> from the World Players Association shed light on the more specific human rights risks faced by professional athletes. Both Tomáš Grell and Daniela Heerdt agreed that international sports governing bodies need to translate their human rights commitments from bidding and hosting agreements to actual practice. Brendan Schwab, for his part, emphasised that sportspeople are human first and athletes second, and introduced the <a href="http://www.uniglobalunion.org/sites/default/files/files/news/world_player_rights_policy_13_jul_17.pdf">World Player Rights Policy</a> adopted by the World Players Association in July 2017.</p>
<p class="MsoNormal" align="justify"><i><u>Keynote Discussion between Michael Beloff QC and Sean Cottrell</u></i></p>
<p class="MsoNormal" align="justify">Throughout his more than 50-years-long career in sports law, <a href="https://www.blackstonechambers.com/barristers/michael-beloff-qc/">Michael Beloff QC</a>, also known as one of the <a href="https://www.lawinsport.com/features/podcast/item/an-interview-with-michael-beloff-qc-described-as-one-of-the-godfathers-of-sports-law">'godfathers of sports law'</a>, has witnessed first-hand the professionalization of sport. This and many more aspects of his truly exceptional career as a sports lawyer featured in his keynote discussion with <a href="https://twitter.com/spcott">Sean Cottrell</a> from <a href="http://www.lawinsport.com">LawInSport</a> (a trusted media partner of the conference). Michael also touched upon some of the contemporary sports law themes, among which the lack of gender equality in the composition of international sports governing bodies, the role of athletes in good governance of sport, inaccuracies in sporting regulations or transparency at the Court of Arbitration for Sport. &nbsp;&nbsp;</p>
<p align="center"><br><iframe src="https://www.youtube.com/embed/cxyjD4KTFgg" allowfullscreen="" gesture="media" width="560" height="315" frameborder="0"></iframe> <br></p><p align="center">
</p><p class="MsoNormal"><b>Day 2</b></p>
<p class="MsoNormal"><i><u>Keynote Lecture by Stephen Weatherill</u></i></p>
<p class="MsoNormal" align="justify">The second day also kicked off with a keynote lecture, this time delivered by Professor <a href="https://www.law.ox.ac.uk/people/stephen-weatherill">Stephen Weatherill</a> from Oxford University, who examined the conditional autonomy enjoyed by international sports governing bodies under EU law. Against the background of <a href="http://www.uefa.com/MultimediaFiles/Download/Tech/uefaorg/General/02/26/77/91/2267791_DOWNLOAD.pdf">UEFA's Financial Fair Play rules</a> or the FIFA's ban on third-party ownership, he explained how sporting rules that would otherwise be incompatible with EU law could nevertheless be justified on account of the specific nature of sport, what he called the 'sporting margin of appreciation'. However; he also criticised the pyramidal structure of international sport for not allowing those at the bottom end (athletes and clubs) to participate in decision-making processes of international sports governing bodies.</p>
<p align="center">
</p><p align="center"><br><iframe src="https://www.youtube.com/embed/FtZbseJTdBs" allowfullscreen="" gesture="media" width="560" height="315" frameborder="0"></iframe></p><p align="center">
</p><p class="MsoNormal"><i><u>Morning Session</u></i></p>
<p class="MsoNormal" align="justify">The first panel of the day, chaired by <a href="https://twitter.com/BenVanRompuy">Ben Van Rompuy</a> from Leiden University, offered some interesting perspectives on the application of EU law to sport. <a href="https://www.linkedin.com/in/stefania-marassi-96274538/">Stefania Marassi</a> from The Hague University of Applied Sciences explored the policies adopted by the European Union with a view to contributing to the promotion of sporting issues in line with Article 165 of the <a href="http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:12012E/TXT&amp;from=EN">Treaty on the Functioning of the European Union</a>. <a href="https://twitter.com/LegalManFlan">Christopher Flanagan</a>, a lawyer practising in England, discussed why attempts to regulate the financial aspects of professional football are met with challenges under EU law. Employing FIFA's private order as a case study, <a href="https://twitter.com/bran_hock">Branislav Hock</a> from the University of Portsmouth argued in his presentation that successful private modes of governance continuously emerge from public interventions, provided that the public acts as a reversed civil society. <b>It is worthwhile to note that Branislav won the award for the best paper presented at the conference.</b></p>
<p class="MsoNormal" align="justify">Thanks to <a href="https://www.wislaw.co/">Women in Sports Law</a>, an association that unites women from more than 40 countries who specialise in sports law, the conference also continued over lunch. <a href="https://twitter.com/lindsaysbrandon">Lindsay Brandon</a>, a sports lawyer practising in the United States, and <a href="https://twitter.com/d_mavromati">Despina Mavromati</a>, a Co-Founder of Women in Sports Law and a former Managing Counsel at the Court of Arbitration for Sport, talked about the current state of whereabouts requirements in the world anti-doping system. They were joined in the discussion by Professor Richard McLaren.</p>
<p class="MsoNormal"><i><u>Keynote Lecture by Richard McLaren</u></i></p>
<p class="MsoNormal" align="justify">After lunch, Professor <a href="https://en.wikipedia.org/wiki/Richard_McLaren_(academic)">Richard McLaren</a> from Western University in Ontario, the former head of WADA's investigation into the Russian doping scandal, spoke about broader challenges to the operation of the world anti-doping system. Among other things, he stressed that athletes have a crucial role in uncovering doping practices, as they know much more about these practices than anybody else. Having insisted that whistleblowers are of utmost importance, he also criticised the International Olympic Committee for its treatment of the Russian athlete Yuliya Stepanova who was eventually blocked from competing at the Rio Olympics despite her exceptional contribution to the fight against doping. In more general terms, Richard asserted that the integrity of sport is threatened not only by doping but also by archaic governance, corruption or match-fixing.</p>
<p align="center"><br><iframe src="https://www.youtube.com/embed/hSOSwbJyrfY" allowfullscreen="" gesture="media" width="560" height="315" frameborder="0"></iframe></p><p><br></p><p>
</p><p class="MsoNormal"><i><u>Afternoon Session</u></i></p><p align="justify">After the lecture given by Richard McLaren, the conference continued with a panel on international sports arbitration chaired by Despina Mavromati. <a href="https://twitter.com/athleteslawyer">Howard Jacobs</a>, an American sports lawyer, together with Lindsay Brandon from his office, discussed the proposal to create a permanent anti-doping division at the Court of Arbitration for Sport. Professor <a href="https://twitter.com/Aurreratze">Jernej Letnar Černič</a> from the Graduate School of Government and European Studies in Ljubljana then looked at how the guarantee of a fair trial could be strengthened in proceedings before the Court of Arbitration for Sport. Finally, <a href="https://twitter.com/kzo_jp">Kazushige Ogawa</a> from Rikkyo University in Tokyo shared his insights on the functioning of the Japan Sports Arbitration Agency. <br><br>The last panel of the conference, chaired by Antoine Duval, addressed one of the most pressing issues in the world of sport – the fight against doping. <a href="https://twitter.com/kelslee777">Kelsey Erickson</a> from Leeds Beckett University examined a range of psychological factors influencing athletes who intend to blow the whistle on doping. <a href="https://twitter.com/JanExner90">Jan Exner</a> from the Czech Olympic Committee focused on the sanctions for anti-doping rule violations, suggesting that a four-year period of ineligibility might be disproportionate. Finally, our last speaker <a href="https://twitter.com/louisereillybl">Louise Reilly</a>, an Irish barrister and a former counsel at the Court of Arbitration for Sport, provided a precise overview of jurisprudence dealing with intentional anti-doping rule violations under the <a href="https://www.wada-ama.org/sites/default/files/resources/files/wada-2015-world-anti-doping-code.pdf">2015 World Anti-Doping Code</a>. <br></p><p class="MsoNormal"><br></p>
<p class="MsoNormal"><b>A thank you note</b></p>
<p class="MsoNormal" align="justify">We would like to take this opportunity to thank all the speakers and participants not only for joining but also for actively contributing to the very rich discussions that followed after each session. We hope that this is only the beginning and that the ISLJ Annual International Sports Law Conference will become a tradition in the coming years. For those who did not have the chance to attend, the ISLJ will publish a special issue including the papers of the conference, so stay tuned!</p>
<p class="MsoNormal">&nbsp;</p>
<p class="MsoNormal" align="justify">Looking forward to seeing you next year,</p>
<p class="MsoNormal" align="justify">&nbsp;</p>
<p class="MsoNormal" align="justify">The team of the Asser International Sports Law Centre</p>
<p class="MsoNormal" align="justify">&nbsp;</p>
<p class="MsoNormal" align="justify">PS: Feel free to leave us comments with your feedback/suggestions, so that we can work on improving the conference.</p>
<br>http://www.asser.nl/SportsLaw/Blog/post/example-of-post-with-islj-videos
http://www.asser.nl/SportsLaw/Blog/post/example-of-post-with-islj-videos#commenthttp://www.asser.nl/SportsLaw/Blog/post.aspx?id=1312a2ee-8318-4bbb-8070-e47fdbb81163Mon, 20 Nov 2017 15:11:00 +0100BlogInternational Sports Law CasesInternational Sports Law EventsInternational Sports Law MaterialAdminhttp://www.asser.nl/SportsLaw/Blog/pingback.axdhttp://www.asser.nl/SportsLaw/Blog/post.aspx?id=1312a2ee-8318-4bbb-8070-e47fdbb811631http://www.asser.nl/SportsLaw/Blog/trackback.axd?id=1312a2ee-8318-4bbb-8070-e47fdbb81163http://www.asser.nl/SportsLaw/Blog/post/example-of-post-with-islj-videos#commenthttp://www.asser.nl/SportsLaw/Blog/syndication.axd?post=1312a2ee-8318-4bbb-8070-e47fdbb81163International and European Sports Law – Monthly Report – October 2017. By Tomáš Grell
<p class="MsoNormal" align="justify"><b>Editor's note:</b> This report compiles all relevant news, events and
materials on International and European Sports Law based on the daily coverage
provided on our twitter feed <a href="https://twitter.com/sportslaw_asser">@Sportslaw_asser.</a> You
are invited to complete this survey via the comments section below, feel free
to add links to important cases, documents and articles we might have
overlooked.
</p><p class="MsoNormal" align="justify"><b>&nbsp;</b></p>
<p class="MsoNormal" align="justify"><b>The Headlines</b></p>
<p class="MsoNormal" align="justify"><i><u>Chairman of the Rio 2016 Organising Committee arrested
on corruption charges</u></i></p>
<p class="MsoNormal" align="justify">On 4 October 2017, Brazilian
authorities <a href="https://www.theguardian.com/world/2017/oct/05/brazilian-police-arrest-olympics-chief-carlos-arthur-nuzman-bribery-investigation">arrested</a> (now former) President of the Brazilian Olympic
Committee and an IOC Honorary Member Carlos Arthur Nuzman. The chairman of the
Rio 2016 Organising Committee was allegedly implicated in a vote-buying scheme
associated with the host selection process for the 2016 Olympic Games. Consequently,
<a href="https://www.olympic.org/news/decision-of-the-ioc-executive-board-regarding-mr-carlos-nuzman-and-the-brazilian-olympic-committee">the IOC Executive Board provisionally suspended Mr Nuzman</a> from his function as an IOC Honorary Member and further
decided to withdraw him from the Coordination Commission for the 2020 Olympic
Games in Tokyo. Moreover, the IOC also provisionally suspended the Brazilian
Olympic Committee, noting that this decision shall not affect Brazilian athletes.
Subsequently, Mr Nuzman <a href="http://www.dailymail.co.uk/sport/olympics_2016/article-4971998/Brazil-Olympic-Committee-president-Carlos-Nuzman-resigns.html">resigned</a> as the President of the Brazilian Olympic Committee.
On 31 October 2017, the IOC <a href="https://www.olympic.org/news/decision-of-the-ioc-executive-board-regarding-the-brazilian-olympic-committee">communicated</a> that the Brazilian Olympic Committee would be allowed
to exercise again its membership rights in associations of National Olympic
Committees. However, the IOC also emphasised that other measures imposed as
part of the provisional suspension of the Brazilian Olympic Committee would
remain in place until the relevant governance issues are addressed to the
satisfaction of the IOC Executive Board. <br></p>
<p class="MsoNormal" align="justify"><i><u>China accused of running a systematic doping programme
in the 1980s and 1990s</u></i></p>
<p class="MsoNormal" align="justify">On 21 October 2017,
a German television broadcasted a <a href="http://www.sportschau.de/doping/doping-chinesische-aerztin-fluechtet-102.html">documentary</a> featuring Xue Yinxian, a 79-year-old Chinese doctor
currently seeking political asylum in Germany. Mrs Yinxian spent a great part
of her life as a physician looking after some of the most prominent Chinese athletes,
in particular the successful gymnasts. In the relevant documentary, she
described a sophisticated state-sponsored doping programme allegedly prevailing in China in the 1980s and 1990s, and demanded
that all medals won by Chinese athletes during the period in question be
withdrawn. In response, <a href="https://www.wada-ama.org/en/media/news/2017-10/wada-statement-on-german-television-documentary-alleging-systematic-doping-in">the World Anti-Doping Agency informed</a> that it had commissioned its Intelligence and
Investigations team to initiate an investigative process in this regard. </p>
<p class="MsoNormal" align="justify"><i><u>Preliminary ruling of the European Court of Justice in
the case involving the English Bridge Union</u></i></p>
<p class="MsoNormal" align="justify">Duplicate bridge is
not a sport, at least not for the purposes of the <a href="http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32006L0112&amp;from=EN">Council Directive 2006/112/EC</a> on the common system of value added tax (<b><i>VAT
Directive</i></b>). This conclusion was reached by the judges of the European
Court of Justice in the <a href="http://curia.europa.eu/juris/document/document.jsf;jsessionid=9ea7d0f130d5f03cab0818d347beaeb7ef4149c4006d.e34KaxiLc3eQc40LaxqMbN4PaNeMe0?text=&amp;docid=196124&amp;pageIndex=0&amp;doclang=en&amp;mode=lst&amp;dir=&amp;occ=first&amp;part=1&amp;cid=1007702">preliminary ruling</a> proceedings involving the English Bridge Union and
the Commissioners for Her Majesty's Revenue &amp; Customs. Most importantly,
the Court asserted that ''<i>an activity
such as duplicate bridge, which is characterised by a physical element that appears
to be negligible, is not covered by the concept of 'sport' within the meaning
of the VAT Directive</i>''. </p>
<p class="MsoNormal" align="justify">&nbsp;</p>
<p class="MsoNormal" align="justify"><b>Sports Law Related Decisions</b></p>
<p align="justify"><ul><li>European
Court of Justice – <a href="http://curia.europa.eu/juris/document/document.jsf;jsessionid=9ea7d0f130d5f03cab0818d347beaeb7ef4149c4006d.e34KaxiLc3eQc40LaxqMbN4PaNeMe0?text=&amp;docid=196124&amp;pageIndex=0&amp;doclang=en&amp;mode=lst&amp;dir=&amp;occ=first&amp;part=1&amp;cid=1007702">Decision in the case between the English Bridge Union
Limited and the Commissioners for Her Majesty's Revenue &amp; Customs</a></li><li>&nbsp;ITF – <a href="http://www.itftennis.com/media/274164/274164.pdf">Decision under the 2017 Tennis Anti-Doping Programme
in the case of Daniel Evans</a></li></ul></p>
<p class="MsoNormal" align="justify">&nbsp;</p>
<p class="MsoNormal" align="justify"><b>Official Documents and Press Releases</b></p>
<p align="justify"><ul><li>CAS – <a href="http://www.tas-cas.org/fileadmin/user_upload/Media_Release_4839.pdf">The appeal filed by high jumper Anna Chicherova
dismissed</a></li><li>FIFA – <a href="http://www.fifa.com/about-fifa/news/y=2017/m=10/news=fifa-council-statement-on-the-final-report-by-the-fifa-monitoring-comm-2917741.html">FIFA Council Statement on the final report by the FIFA
Monitoring Committee Israel-Palestine</a></li><li>FIFA –<b> </b><a href="http://www.fifa.com/governance/news/y=2017/m=10/news=fifa-suspends-the-pakistan-football-federation-2913299.html">FIFA suspends the Pakistan Football Federation</a></li><li>IOC – <a href="https://stillmed.olympic.org/media/Document%20Library/OlympicOrg/Games/Winter-Games/Games-2026-Winter-Olympic-Games/Candidature-Process-Olympic-Winter-Games-2026-Final-September%202017.pdf#_ga=2.267488716.336189243.1509362212-1915251872.1489056376">Candidature Process for the Olympic Winter Games 2026</a></li><li>IOC –<b> </b><a href="https://stillmed.olympic.org/media/Document%20Library/OlympicOrg/Games/Winter-Games/Games-2026-Winter-Olympic-Games/Candidature-Questionnaire-2026.pdf#_ga=2.130237005.336189243.1509362212-1915251872.1489056376">Candidature Questionnaire for the Olympic Winter Games
2026</a></li><li>IOC –<b> </b><a href="https://www.olympic.org/news/decision-of-the-ioc-executive-board-regarding-mr-carlos-nuzman-and-the-brazilian-olympic-committee">Decision of the IOC Executive Board regarding Mr
Carlos Nuzman and the Brazilian Olympic Committee</a></li><li>IOC –<b> </b><a href="https://www.olympic.org/news/decision-of-the-ioc-executive-board-regarding-the-brazilian-olympic-committee">Decision of the IOC Executive Board regarding the
Brazilian Olympic Committee</a></li><li>IOC –<b> </b><a href="https://www.olympic.org/news/ioc-launches-a-new-approach-to-the-candidature-process-for-the-olympic-winter-games-2026">IOC launches a new approach to the Candidature Process
for the Olympic Winter Games 2026</a></li><li>Tennis
Integrity Unit –<b> </b><a href="http://www.tennisintegrityunit.com/storage/app/media/Media%20Releases/TIU%20Briefing%20Note%20October%202017.pdf">Briefing note October 2017</a></li><li>UEFA – <a href="http://www.uefa.com/insideuefa/about-uefa/news/newsid=2510176.html#/">2016/17 solidarity payments for youth development</a></li><li>UEFA –<b> </b><a href="https://www.uefa.com/insideuefa/protecting-the-game/club-licensing-and-financial-fair-play/news/newsid=2513290.html?rss=2513290+Club+licensing+and+FFP+keeps+clubs+on+positive+course#/">Club licensing and FFP keeps clubs on positive course</a></li><li>UEFA –<b> </b><a href="http://www.uefa.com/insideuefa/mediaservices/mediareleases/newsid=2509418.html#/">UEFA and FARE network unite to promote inclusion,
diversity and accessibility</a></li><li>UNI
Global Union – <a href="http://www.uniglobalunion.org/news/human-rights-are-also-player-rights">Human rights are also player rights</a></li><li>WADA – <a href="https://www.wada-ama.org/sites/default/files/resources/files/ioc_adr_pyeongchang_2018_eng.pdf">Anti-Doping Rules applicable to the Olympic Winter
Games PyeongChang 2018</a></li><li>WADA –<b> </b><a href="https://www.wada-ama.org/en/media/news/2017-10/wada-statement-on-german-television-documentary-alleging-systematic-doping-in">Statement on German television documentary alleging
systematic doping in China during the 1980s and 1990s</a></li><li>WADA –<b> </b><a href="https://www.wada-ama.org/en/media/news/2017-10/wada-executive-committee-ratifies-board-membership-for-independent-testing">WADA Executive Committee ratifies Board Membership for
Independent Testing Authority</a></li><li>WADA –<b> </b><a href="https://www.wada-ama.org/en/media/news/2017-10/wada-publishes-2016-testing-figures-report">WADA publishes 2016 Testing Figures Report</a></li></ul></p>
<p class="MsoListParagraphCxSpLast" align="justify"><b>&nbsp;</b></p>
<p class="MsoNormal" align="justify"><b>In the news</b></p>
<p class="MsoNormal" align="justify"><i>Doping</i></p>
<p align="justify"><ul><li>Associated
Press <a href="http://www.espn.com/olympics/story/_/id/20978520/court-arbitration-sport-uses-mclaren-report-uphold-russian-doping-case">CAS uses McLaren report to uphold doping suspension</a></li><li>Associated
Press <a href="https://www.yahoo.com/news/italian-cyclist-pirazzi-gets-4-ban-pre-giro-151414629.html">Italian cyclist Pirazzi gets 4-year ban for pre-Giro
doping</a></li><li>Andy
Brown <a href="http://www.sportsintegrityinitiative.com/nado-italia-sanctions-five-athletes-anti-doping-rule-violations/">NADO Italia announces five sanctions for anti-doping
rule violations</a></li><li>Rob
Draper and Nick Harris <a href="http://www.dailymail.co.uk/sport/doping/article-4699856/IOC-did-not-want-drug-samples-retested-avoid-scandals.html">IOC 'did not want drug samples retested to avoid
scandals' claims explosive memo sent to the KGB</a></li><li>Sean
Ingle <a href="https://www.theguardian.com/sport/2017/oct/22/china-compulsory-doping-olympic-athletes-claims-whistleblower-athletics">China 'compulsorily doped' athletes in 1980s and 90s,
claims whistleblower</a></li><li>Martha
Kelner <a href="https://www.theguardian.com/sport/2017/oct/10/call-for-athletes-to-be-fitted-with-microchips-fight-against-drug-cheats">Call for athletes to be fitted with microchips in
fight against drug cheats</a></li><li>RT News
<a href="https://www.rt.com/shows/sophieco/407261-russia-winter-olympics-2018/">Russian Sports Minister: People must own up to
mistakes, but collective responsibility is wrong</a></li><li>Sportschau
<a href="http://www.sportschau.de/doping/doping-chinesische-aerztin-fluechtet-102.html">China's doped ascent to sports superpower</a></li><li>TASS <a href="http://tass.com/sport/970333">Russian Olympic chief: IOC received full report on
Russia's anti-doping fight progress</a></li></ul></p>
<p class="MsoNormal" align="justify"><i>Football</i></p>
<p align="justify"><ul><li>Al
Jazeera <a href="http://www.aljazeera.com/news/2017/10/fifa-delays-action-israeli-settlement-teams-171027124839956.html">FIFA will not take action on Israeli settlement teams</a></li><li>Associated
Press <a href="http://www.dailymail.co.uk/wires/ap/article-4969330/Former-FIFA-official-Valcke-appeals-ban-soccer.html">Former FIFA official Valcke testifies in soccer ban
appeal</a></li><li>BBC
News <a href="http://www.bbc.com/sport/football/41498052">Adrien Silva: Leicester City do not rule out CAS appeal
over signing</a></li><li>Michael
Church <a href="https://uk.reuters.com/article/uk-soccer-china-csl/chinese-super-league-to-bring-in-foreign-refs-for-final-rounds-idUKKBN1CH2DQ">Chinese Super League to bring in foreign referees for
final rounds</a></li><li>CIES
Football Observatory <a href="http://www.football-observatory.com/IMG/sites/b5wp/2017/198/en/">Apollon Limassol at the top of the expatriate table</a></li><li>David
Conn <a href="https://www.theguardian.com/football/2017/oct/12/psg-chairman-nasser-al-khelaifi-accused-world-cup-bribery">PSG chairman Nasser al-Khelaifi accused of World Cup
bribe by Swiss prosecutor</a></li><li>European
Professional Football Leagues <a href="http://mailchi.mp/fb80af97d9db/ayq6e6qruz-1117665">Legal Newsletter</a></li><li>Brian
Homewood <a href="https://uk.reuters.com/article/uk-soccer-fifa-transfers/soccer-fifa-hopeful-transfer-system-complaint-will-be-withdrawn-idUKKBN1CO2P6">FIFA hopeful transfer system complaint will be
withdrawn</a></li><li>Jack
Newsham <a href="https://www.law360.com/sports/articles/975587?utm_content=buffer2dd54&amp;utm_medium=social&amp;utm_source=twitter.com&amp;utm_campaign=buffer">Jury to be kept from media in FIFA corruption case</a></li><li>Tariq
Panja <a href="https://www.nytimes.com/2017/10/06/sports/soccer/brazil-women-soccer.html?partner=rss&amp;emc=rss&amp;_r=0">Brazil's women soccer players in revolt against
federation</a></li><li>Tariq Panja <a href="https://www.nytimes.com/2017/10/26/sports/soccer/fifa-world-cup.html">How did a tiny Swiss company quietly secure valuable
World Cup TV rights?</a></li><li>Qatar Tribune
<a href="http://www.qatar-tribune.com/news-details/id/90935">Kuwait and FIFA reach agreement on country's sports
law</a></li><li>Reuters
<a href="http://www.reuters.com/article/us-soccer-fifa-nationalities/fifa-to-look-into-changing-nationality-rules-idUSKBN1CO31N">FIFA to look into changing nationality rules</a></li><li>Reuters
<a href="http://www.skysports.com/football/news/11095/11069613/ricardo-carvalho-given-prison-sentence-for-tax-fraud-in-spain">Ricardo Carvalho given prison sentence for tax fraud in
Spain</a></li><li>Grant
Wahl <a href="https://www.si.com/soccer/2017/10/08/fifa-women-soccer-equal-pay-norway-gianni-infantino">What FIFA and the rest of the world can learn from
Norway's equitable pay agreement</a></li><li>World
Sports Advocate <a href="http://www.cecileparkmedia.com/world-sports-advocate/article_template.asp?Contents=Yes&amp;from=wslr&amp;ID=2013">Interview with Miguel Maduro, former chair of FIFA's
Governance Committee</a></li></ul></p>
<p class="MsoNormal" align="justify"><i>Other</i></p><p align="justify"><ul><li>Matthew
Allen <a href="https://www.swissinfo.ch/eng/economics-of-sport_swiss-economy-to-benefit-from-olympics-and-world-cup/43573594">Swiss economy to benefit from Olympics and World Cup</a></li></ul><ul><li>Andy
Brown <a href="http://www.sportsintegrityinitiative.com/worleys-case-opens-courts-athlete-human-rights-cases/">Worley's case opens the courts to athlete human rights
cases</a></li><li>Nick
Butler <a href="https://www.insidethegames.biz/articles/1056254/ioc-members-raise-concerns-over-reputational-damage-to-olympic-movement-following-corruption-allegations">IOC members raise concerns over reputational damage to
Olympic Movement following corruption allegations</a></li><li>Nick Butler <a href="https://www.insidethegames.biz/articles/1057272/nick-butler-olympic-summit-a-missed-opportunity-to-make-a-decisive-statement">Olympic summit a missed opportunity to make a decisive
statement</a></li><li>Nick Butler <a href="https://www.insidethegames.biz/articles/1057238/olympic-summit-calls-for-all-athlete-commissions-to-be-elected-in-apparent-dig-at-wada">Olympic summit calls for all athlete commissions to be
elected in apparent dig at WADA</a></li><li>Sayan
Das <a href="http://www.givemesport.com/1167856-british-tennis-player-reveals-match-fixing-offer-at-tournament-in-greece">British tennis player reveals match-fixing offer at
tournament in Greece</a></li><li>Martha Kelner <a href="https://www.theguardian.com/world/2017/oct/05/brazilian-police-arrest-olympics-chief-carlos-arthur-nuzman-bribery-investigation">Rio 2016 Olympic chief Carlos Nuzman arrested in
corruption investigation</a></li><li>Yoon
Min-Sik <a href="http://nwww.koreaherald.com/view.php?ud=20171011000896">PyeongChang Olympics ticket sales get icy reception</a></li><li>Sporting
Life <a href="https://www.sportinglife.com/tennis/news/65-%27alerts%27-over-betting-patterns/112648">Tennis Integrity Unit reveals 65 'match alerts' received
in third quarter of 2017 of suspicious betting patterns</a></li><li>Sportschau
<a href="http://www.sportschau.de/weitere/allgemein/video-german-olympic-athletes-ready-to-set-up-an-autonomous-athletes-organisation-100.html">German Olympic athletes ready to set up an autonomous
athletes organisation</a></li></ul></p>
<p class="MsoListParagraphCxSpLast" align="justify"><b>&nbsp;</b></p>
<p class="MsoNormal" align="justify"><b>Academic Materials</b></p>
<p align="justify"><ul><li>&nbsp;Michael
A. McCann <a href="https://global.oup.com/academic/product/the-oxford-handbook-of-american-sports-law-9780190465957?cc=us&amp;lang=en&amp;">The Oxford Handbook of American Sports Law</a></li></ul></p>
<p class="MsoNormal" align="justify"><b>&nbsp;</b></p>
<p class="MsoNormal" align="justify"><b>Blog</b></p>
<p class="MsoNormal" align="justify"><i>Asser International Sports Law Blog</i></p>
<p align="justify"><ul><li>Christopher Flanagan <a href="http://www.asser.nl/SportsLaw/Blog/post/the-evolution-of-uefa-s-financial-fair-play-rules-part-3-past-reforms-and-uncertain-future-by-christopher-flanagan">The Evolution of UEFA's Financial Fair Play Rules – Part 3: Past Reforms
and Uncertain Future</a></li><li>Tomáš Grell <a href="http://www.asser.nl/SportsLaw/Blog/post/multi-club-ownership-in-european-football-part-i-general-introduction-and-the-enic-saga-by-tomas-grell">Multi-Club Ownership in European
Football – Part 1: General Introduction and the ENIC Saga</a></li><li>Tomáš Grell <a href="http://www.asser.nl/SportsLaw/Blog/post/multi-club-ownership-in-european-football-part-ii-the-concept-of-decisive-influence-in-the-red-bull-case-by-tomas-grell">Multi-Club Ownership in European
Football – Part 2: The Concept of Decisive Influence in the Red Bull Case</a></li><li>Josep F. Vandellos Alamilla <a href="http://www.asser.nl/SportsLaw/Blog/post/the-limits-to-multiple-representation-by-football-intermediaries-under-fifa-rules-and-swiss-law-by-josep-f-vandellos-alamilla">The Limits to Multiple Representation by Football Intermediaries under FIFA
Rules and Swiss Law</a></li></ul></p>
<p class="MsoNormal" align="justify"><i>Law in Sport</i>&nbsp;
</p><p align="justify"><ul><li>Roberto
Carlos Branco Martins and Matthew Graham <a href="https://www.lawinsport.com/articles/item/how-football-intermediaries-are-regulated-in-the-netherlands-the-role-of-proagent">How football intermediaries are regulated in the
Netherlands: The role of pro-agent</a></li><li>Rebecca
Carlyon and Kate Molan <a href="https://www.lawinsport.com/articles/item/the-lifecycle-of-an-international-athlete-part-6-dealing-with-divorce">The lifecycle of an international athlete – Part 6:
Dealing with divorce</a></li><li>Jeremy
Clarke-Williams <a href="https://www.lawinsport.com/articles/item/the-lifecycle-of-an-international-athlete-part-7-protecting-your-reputation">The lifecycle of an international athlete – Part 7:
Protecting your reputation</a></li><li>Clare
Coley <a href="https://www.lawinsport.com/articles/item/the-lifecycle-of-an-international-athlete-part-5-important-pension-considerations">The lifecycle of an international athlete – Part 5:
Important pension considerations</a></li><li>Philip
Hutchinson <a href="https://www.lawinsport.com/articles/item/key-changes-in-wada-s-2018-prohibited-list-ivs-gene-doping">Key changes in WADA's 2018 Prohibited List: IVS &amp;
gene doping</a></li><li>&nbsp;Nan Sato and Shoichi
Sugiyama <a href="https://www.lawinsport.com/articles/item/must-athletes-prove-how-a-banned-substance-entered-their-body-to-establish-lack-of-intention">Must athletes prove how a banned substance entered
their body to establish lack of intention?</a></li><li>Duncan
Taylor <a href="https://www.lawinsport.com/articles/item/the-lifecycle-of-an-international-athlete-part-8-navigating-the-uk-property-market">The lifecycle of an international athlete – Part 8:
Navigating the UK property market</a></li></ul></p>
<p class="MsoNormal" align="justify"><i>Others</i></p>
<p align="justify"><ul><li>Stephen
Nathan <a href="https://www.sportslawbulletin.org/tax-raid-premier-league-club-lawful/">Tax raid on Premier League club lawful</a></li><li>Grigory
Rodchenkov <a href="https://www.nytimes.com/2017/09/22/opinion/russia-olympic-doping-rodchenkov.html?_r=0">Russia's Olympic cheating, unpunished</a></li><li>Eran
Yashiv <a href="http://voxeu.org/article/neymar-bubble">The value of top footballers, bubbles, and pitfalls of
the free market</a> </li></ul></p>
<p class="MsoListParagraphCxSpLast" align="justify">&nbsp;</p>
<p class="MsoNormal" align="justify"><b>Upcoming Events</b></p>
<p align="justify"><ul><li>16
November – <a href="https://www.eventbrite.com/e/first-wislaw-annual-conference-general-assembly-tickets-37334429283">WISLaw Annual Conference and General Assembly</a>, Madrid, Spain</li><li>26-30
November – <a href="http://playthegame.org/news/news-articles/2017/0304_registration-for-play-the-game-2017-is-open/">Play the Game 2017: Riding Waves of Change</a>, Eindhoven, the Netherlands</li><li>16
March 2018 – <a href="https://www.eventbrite.co.uk/e/sports-law-and-business-conference-manchester-tickets-39401863033?aff=es2">Sports Law &amp; Business Conference</a>, Etihad Stadium, Manchester, England</li></ul></p>
http://www.asser.nl/SportsLaw/Blog/post/international-and-european-sports-law-monthly-report-october-2017-by-tomas-grell
http://www.asser.nl/SportsLaw/Blog/post/international-and-european-sports-law-monthly-report-october-2017-by-tomas-grell#commenthttp://www.asser.nl/SportsLaw/Blog/post.aspx?id=12ae9be2-0ca8-4bea-9a30-e54027e895feTue, 07 Nov 2017 13:11:00 +0100BlogInternational Sports Law CasesInternational Sports Law EventsInternational Sports Law MaterialInternational Sports Law PublicationsAntoine Duvalhttp://www.asser.nl/SportsLaw/Blog/pingback.axdhttp://www.asser.nl/SportsLaw/Blog/post.aspx?id=12ae9be2-0ca8-4bea-9a30-e54027e895fe0http://www.asser.nl/SportsLaw/Blog/trackback.axd?id=12ae9be2-0ca8-4bea-9a30-e54027e895fehttp://www.asser.nl/SportsLaw/Blog/post/international-and-european-sports-law-monthly-report-october-2017-by-tomas-grell#commenthttp://www.asser.nl/SportsLaw/Blog/syndication.axd?post=12ae9be2-0ca8-4bea-9a30-e54027e895feMulti-Club Ownership in European Football – Part II: The Concept of Decisive Influence in the Red Bull Case – By Tomáš Grell<p align="justify"><b>&nbsp;</b></p>
<p class="MsoNormal" align="justify"><b>Introduction</b>&nbsp;
</p><p class="MsoNormal" align="justify">The<a href="http://www.asser.nl/SportsLaw/Blog/post/multi-club-ownership-in-european-football-part-i-general-introduction-and-the-enic-saga-by-tomas-grell"> first part</a> of this
two-part blog on multi-club ownership in European football outlined the circumstances
leading to the adoption of the initial rule(s) aimed at ensuring the integrity
of the UEFA club competitions (<b><i>Original Rule</i></b>) and retraced the
early existence of such rule(s), focusing primarily on the complaints brought
before the Court of Arbitration for Sport and the European Commission by the
English company ENIC plc. This second part will, in turn, introduce the
relevant rule as it is currently enshrined in Article 5 of the <a href="http://www.uefa.com/MultimediaFiles/Download/Regulations/uefaorg/Regulations/02/46/71/38/2467138_DOWNLOAD.pdf">UCL Regulations
2015-18 Cycle, 2017/18 Season</a> (<b><i>Current Rule</i></b>). It will then explore how the UEFA Club Financial
Control Body (<b><i>CFCB</i></b>) interpreted and applied the Current Rule in the Red Bull
case, before drawing some concluding remarks.&nbsp; </p>
<p class="MsoNormal" align="justify">&nbsp;</p>
<p class="MsoNormal" align="justify"><b>The Red Bull case: The concept of <i>decisive influence</i></b></p>
<p class="MsoNormal" align="justify"><i><u>Background</u></i>&nbsp;
</p><p class="MsoNormal" align="justify">The company Red Bull
GmbH (<b><i>Red Bull</i></b>) started building its football empire<a href="#_ftn1" name="_ftnref1" title="">[1]</a> in
2005 by transforming the Austrian club SV Wüstenrot Salzburg<a href="#_ftn2" name="_ftnref2" title="">[2]</a>
into what would henceforth be known as FC Red Bull Salzburg (<b><i>RB
Salzburg</i></b>). As regards its legal form, RB Salzburg is currently a
limited liability company (GmbH) wholly owned by the association FC Red Bull
Salzburg e.V. Until 2015, when the club began a <a href="http://www.redbullsalzburg.at/en/fc-red-bull-salzburg/news/saison_2017_18/fc-red-bull-salzburg-comply-with-rules-on-integrity-of-competition-.html">disengagement
process from Red Bull</a>, the
statutes of FC Red Bull Salzburg e.V. conferred on Red Bull the right to
appoint and remove the members of the association's board.</p>
<p class="MsoNormal" align="justify">In 2009, with the
objective of playing the top-flight Bundesliga within a decade, Red Bull
invested in the German club SSV Markranstädt, at that time competing in the
fifth tier of German football. The club was subsequently rechristened as RasenBallsport<a href="#_ftn3" name="_ftnref3" title="">[3]</a>
Leipzig (<b><i>RB Leipzig</i></b>) and rebranded. Although RB Leipzig thrived on the
pitch, it <a href="https://www.theguardian.com/football/2016/sep/08/why-rb-leipzig-has-become-the-most-hated-club-in-german-football">attracted much
criticism</a> off
the pitch for attempting to circumvent the so-called '50+1 rule', according to
which German football clubs may not allow investors to acquire a majority of
their voting rights. </p>
<p class="MsoNormal" align="justify">Since
Red Bull's takeover of RB Leipzig in 2009, the two clubs have maintained a
close cooperation involving an increased transfer activity which has seen
players moving from one club to the other on a regular basis. With the help of
players like <a href="https://www.theguardian.com/football/2017/aug/28/liverpool-sign-naby-keita-rb-leipzig-next-summer-klopp-lemar-monaco">Naby Keïta</a>, who moved from RB Salzburg to
RB Leipzig in the summer of 2016, the German club finished second in the
2016/17 Bundesliga season, its first-ever in the top flight, and qualified for
the 2017/18 UCL group stage. RB Salzburg, for their part, added in the 2016/17
campaign another domestic title to their collection and secured a spot in the
2017/18 UCL second qualifying round.</p>
<p class="MsoNormal" align="justify"><i><u>The Current Rule</u></i>&nbsp;&nbsp; </p>
<p class="MsoNormal" align="justify">As mentioned above, the
Current Rule is encapsulated in Article 5 of the UCL Regulations 2015-18 Cycle,
2017/18 Season (<b><i>UCL Regulations</i></b>). It preserves the structure of the Original
Rule, making admission to the UEFA club competitions conditional upon
fulfilment of three specific criteria. In terms of substance, however, the
Current Rule differs in two important aspects. First, unlike the Original Rule
which outlawed ownership, personal and other links only between clubs
participating in the <i>same</i> UEFA club
competition, the Current Rule extends this prohibition to clubs participating
both in the UCL and the UEFA Europe League. Second, an individual or legal
entity is now deemed to have <i>control</i>
over a club not only if he/she/it (i) holds a majority of the shareholders'
voting rights; (ii) is authorized to appoint or remove a majority of the
members of the administrative, management or supervisory body; or (iii) is a
shareholder and single-handedly controls a majority of the shareholders' voting
rights, but also if he/she/it (iv) is able to exercise by any means a <i>decisive influence</i> in the
decision-making of the club.<a href="#_ftn4" name="_ftnref4" title="">[4]</a>
The purpose of this latter change is to address situations where an individual
or legal entity falls short of having <i>de
jure</i> control over a club, but nevertheless remains able to exercise such an
influence that may, if exercised in more than one club, jeopardize the
integrity of the UEFA club competitions. As will be discussed in the next
section, the concept of <i>decisive
influence</i> played a pivotal role in the Red Bull case.</p>
<p class="MsoNormal" align="justify">Furthermore, the <i>club coefficient</i> no longer serves as a
principal criterion in determining which of the two or more commonly owned
clubs should participate in a UEFA club competition. Under the Current Rule,
the club which qualifies on sporting merit for the more prestigious UEFA club
competition is to be favoured.<a href="#_ftn5" name="_ftnref5" title="">[5]</a> If
two or more commonly owned clubs qualify for the same UEFA club competition,
then the club which was best-ranked in its domestic championship should be
admitted.<a href="#_ftn6" name="_ftnref6" title="">[6]</a></p>
<p class="MsoNormal" align="justify"><i><u>Proceedings before the CFCB</u></i> </p>
<p class="MsoNormal" align="justify">On 15 May 2017, soon
after RB Salzburg and RB Leipzig had both secured their place in the 2017/18
UCL, the UEFA General Secretary dispatched a letter to the CFCB, expressing his
concern that the clubs might not fulfil the criteria enshrined in the Current
Rule. The subsequent investigation conducted by the CFCB Investigatory Chamber
relied to a great extent on compliance reports prepared by independent
auditors. On 26 May 2017, the CFCB Chief Investigator referred the case to the
CFCB Adjudicatory Chamber, concluding that the clubs had failed to satisfy the
criteria set out in the Current Rule and, as a result, only RB Salzburg should
be admitted to the 2017/18 UCL.<a href="#_ftn7" name="_ftnref7" title="">[7]</a> In
particular, the CFCB Chief Investigator suggested that Red Bull exercised <i>decisive influence </i>in the
decision-making of both RB Salzburg and RB Leipzig, and identified several ways
in which this influence manifested itself. For instance, the CFCB Chief
Investigator drew attention to the presence of certain individuals allegedly
linked to Red Bull in the decision-making bodies of both clubs or an unusually
high level of income received by the clubs from Red Bull via sponsorship
agreements.<a href="#_ftn8" name="_ftnref8" title="">[8]</a></p>
<p class="MsoNormal" align="justify">In its <a href="http://www.uefa.com/MultimediaFiles/Download/OfficialDocument/uefaorg/ClubFinancialControl/02/48/50/34/2485034_DOWNLOAD.pdf">decision</a> handed down on
16 June 2017, the CFCB Adjudicatory
Chamber paid attention mainly to the changes made by RB Salzburg as part of the
club's disengagement process from Red Bull. As noted above, Red Bull ceased to
have the right to appoint and remove the board members of FC Red Bull Salzburg
e.V. in 2015, when the association's statutes were amended accordingly. With
this in mind, the CFCB Adjudicatory Chamber had to examine whether Red Bull was
not able to exercise <i>decisive influence</i>
in the decision-making of RB Salzburg (and RB Leipzig) by any other means. </p>
<p class="MsoNormal" align="justify">The CFCB Adjudicatory
Chamber was confronted with an onerous task, in particular because the UCL
Regulations do not specify when an individual or legal entity is deemed to have
<i>decisive influence</i> in the
decision-making of a club. Nor do these regulations clarify how such a level of
influence could be attained. Having examined the wording and purpose of the
Current Rule, the CFCB Adjudicatory Chamber asserted that ''<i>the benchmark for establishing decisive influence is a high one</i>'',<a href="#_ftn9" name="_ftnref9" title="">[9]</a>
finding support for its conclusion in the <a href="http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:32004R0139&amp;from=nl">EU Merger
Regulation</a>.<a href="#_ftn10" name="_ftnref10" title="">[10]</a> For the avoidance of doubt, the
Chamber further noted that the concept of <i>decisive
influence</i> is not to be confused with that of <i>significant influence</i> which features in the <a href="http://www.uefa.com/MultimediaFiles/Download/Tech/uefaorg/General/02/26/77/91/2267791_DOWNLOAD.pdf">UEFA Club
Licensing and Financial Fair Play Regulations, Edition 2015</a>.<a href="#_ftn11" name="_ftnref11" title="">[11]</a></p>
<p class="MsoNormal" align="justify">In
determining whether Red Bull was indeed capable of exercising <i>decisive influence</i> in the
decision-making of both clubs, the CFCB Adjudicatory Chamber observed from the
aforementioned compliance reports that RB Salzburg had removed certain individuals
allegedly linked to Red Bull from the club's decision-making bodies and
terminated certain loan agreements entered into with the beverage company.<a href="#_ftn12" name="_ftnref12" title="">[12]</a>
With the aim of refuting the CFCB Chief Investigator's allegations, RB Salzburg
presented additional documentary evidence. According to the CFCB Adjudicatory
Chamber, it followed from such evidence, <i>inter
alia</i>, that Red Bull had reduced the amount of sponsorship money paid to the
Austrian club or that a cooperation agreement between the two clubs had been
terminated.<a href="#_ftn13" name="_ftnref13" title="">[13]</a>
This evidence alleviated the CFCB Chief Investigator's concerns to such an
extent that he eventually decided to withdraw his objection to the admission of
RB Salzburg and RB Leipzig to the 2017/18 UCL.<a href="#_ftn14" name="_ftnref14" title="">[14]</a>
Consequently, the CFCB Adjudicatory Chamber held that, at the time of its
decision, Red Bull's relationship with RB Salzburg resembled ''<i>only a standard sponsorship relationship</i>''.<a href="#_ftn15" name="_ftnref15" title="">[15]</a>
Having concluded that Red Bull did not have <i>decisive
influence</i> in the decision-making of RB Salzburg, there was no need for the
Chamber to consider Red Bull's relationship with RB Leipzig.<a href="#_ftn16" name="_ftnref16" title="">[16]</a>
</p>
<p class="MsoNormal" align="justify">Furthermore,
the CFCB Adjudicatory Chamber verified whether one of the clubs did not
exercise <i>decisive influence</i> over the
other. In this regard, the Chamber referred to the cooperation agreement and
the increased transfer activity between the clubs. Nonetheless, the Chamber
eventually stated that there was insufficient evidence to arrive at the
conclusion that RB Salzburg exercised <i>decisive
influence</i> over RB Leipzig or <i>vice
versa</i>.<a href="#_ftn17" name="_ftnref17" title="">[17]</a></p>
<p class="MsoNormal" align="justify">&nbsp;</p>
<p class="MsoNormal" align="justify"><b>Further implications and
concluding remarks</b></p>
<p class="MsoNormal" align="justify">Rules aimed at ensuring
the integrity of club competitions also exist at the national level. In
England, the <a href="https://www.premierleague.com/publications">Rules of the Premier League</a> stipulate, <i>inter
alia</i>, that a person<a href="#_ftn18" name="_ftnref18" title="">[18]</a> –
be it either natural person, legal entity, firm or unincorporated association –
may not (i) be involved in or have any power to determine or influence the
management or administration of more than one club participating either in the
Premier League or the <a href="https://www.efl.com/">English
Football League</a>;<a href="#_ftn19" name="_ftnref19" title="">[19]</a>
and (ii) hold or acquire any <i>significant
interest </i>in more than one club participating in the Premier League. A
person is deemed to have acquired <i>significant
interest</i> in a club if he/she/it holds <i>10
per cent or more </i>of the shareholders' voting rights.<a href="#_ftn20" name="_ftnref20" title="">[20]</a> In Spain, an individual or legal
entity may not hold <i>5 per cent or more </i>of
the shareholders' voting rights in more than one club participating in a
professional competition at the state level.<a href="#_ftn21" name="_ftnref21" title="">[21]</a></p>
<p class="MsoNormal" align="justify">It follows that both in
England and Spain, the pertinent regulations set a relatively low threshold of
the shareholders'
voting rights that an individual or legal entity may not exceed in more than
one club participating in the same domestic club competition. Moving back to
UEFA, the Current Rule sets the relevant threshold at <i>50 per cent</i> (majority of the shareholders' voting rights), but
complements it with the 'catch-all' notion of <i>decisive influence</i>. </p>
<p class="MsoNormal" align="justify">I
believe that the CFCB Adjudicatory Chamber may have missed a golden opportunity
in the Red Bull case to clarify further the rather vague concept of <i>decisive influence</i>. Unfortunately, the
Chamber limited itself to stating that ''<i>the
benchmark for establishing decisive influence is a high one</i>'',<a href="#_ftn22" name="_ftnref22" title="">[22]</a>
without providing any concrete examples of how such a level of influence could
be attained or manifested in practice.<a href="#_ftn23" name="_ftnref23" title="">[23]</a>
The concept of <i>decisive influence </i>therefore
remains shrouded in legal uncertainty. Moreover, in order to avoid
speculations, the Chamber could have provided more details about the changes
made by RB Salzburg. For instance, it could have specified which individuals allegedly
linked to Red Bull were removed from the club's decision-making bodies or how
the amount of sponsorship money paid to the club was reduced. Such details
become particularly important if the concept of <i>decisive influence</i> plays a central role, because in this context
the general public will not be able to access most of the relevant information via
commercial registers. In contrast, this will not be the case with legal systems
in England or Spain which employ a threshold of the shareholders' voting rights
as a key criterion. Thus, if UEFA fails to provide such details (subject to
confidentiality rules) in its decisions, its credibility might suffer.</p>
<p class="MsoNormal" align="justify">Despite
the fact that this post has identified certain flaws of the concept of <i>decisive influence</i>, I do not believe
that a modification of the Current Rule should be a matter of urgency. As
suggested above, a well-reasoned decision may foster UEFA's credibility and
help reduce the legal uncertainty emanating from the concept of <i>decisive influence</i>. Bearing in mind the
recent revitalization of multi-club ownership in European football, UEFA might
soon get another opportunity to deliver such decision.</p>
<p></p><hr align="left" size="1" width="33%">
<p id="ftn1">
</p><p class="Footnote"><a href="#_ftnref1" name="_ftn1" title="">[1]</a> &nbsp; It should be noted that in addition to FC Red Bull Salzburg and RasenBallsport
Leipzig, Red Bull also owns the U.S. club New York Red Bulls and the Brazilian
club Red Bull Brasil.</p>
<p></p>
<p id="ftn2">
</p><p class="Footnote"><a href="#_ftnref2" name="_ftn2" title="">[2]</a> &nbsp; It was often referred to as SV Austria Salzburg, a name that was
given to the club at its foundation in 1933.</p>
<p></p>
<p id="ftn3">
</p><p class="Footnote"><a href="#_ftnref3" name="_ftn3" title="">[3]</a> &nbsp; In fact, due to the rules prohibiting clubs to be named after their
sponsors, the abbreviation 'RB' does not officially stand for Red Bull, but
rather for RasenBallsport which can be roughly translated as 'lawn ball sports'.
</p>
<p></p>
<p id="ftn4">
</p><p class="Footnote"><a href="#_ftnref4" name="_ftn4" title="">[4]</a> &nbsp; UCL Regulations, Article 5.01(c).</p>
<p></p>
<p id="ftn5">
</p><p class="Footnote"><a href="#_ftnref5" name="_ftn5" title="">[5]</a> &nbsp; Ibid. Article 5.02(a).</p>
<p></p>
<p id="ftn6">
</p><p class="Footnote"><a href="#_ftnref6" name="_ftn6" title="">[6]</a> &nbsp; Ibid. Article 5.02(b).</p>
<p></p>
<p id="ftn7">
</p><p class="Footnote"><a href="#_ftnref7" name="_ftn7" title="">[7]</a> &nbsp; As the Austrian club finished first in its domestic championship
(whilst RB Leipzig finished second).</p>
<p></p>
<p id="ftn8">
</p><p class="Footnote"><a href="#_ftnref8" name="_ftn8" title="">[8]</a> &nbsp; CFCB Adjudicatory Chamber AC-01/2017 <i>RasenBallsport Leipzig GmbH and FC Red Bull Salzburg GmbH</i>, Decision
of 16 June 2017, para. 11.</p>
<p></p>
<p id="ftn9">
</p><p class="Footnote"><a href="#_ftnref9" name="_ftn9" title="">[9]</a> &nbsp; Ibid. para. 41.</p>
<p></p>
<p id="ftn10">
</p><p class="Footnote"><a href="#_ftnref10" name="_ftn10" title="">[10]</a> Council Regulation (EC) No 139/2004 of 20 January 2004 on the
control of concentrations between undertakings, Article 3(2). See also <a href="http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=OJ:C:2008:095:0001:0048:EN:PDF">Commission Consolidated
Jurisdictional Notice</a> under Council Regulation (EC) No 139/2004 on the control of
concentrations between undertakings.</p>
<p></p>
<p id="ftn11">
</p><p class="Footnote"><a href="#_ftnref11" name="_ftn11" title="">[11]</a> CFCB Adjudicatory Chamber decision (n 8) para. 40.</p>
<p></p>
<p id="ftn12">
</p><p class="Footnote"><a href="#_ftnref12" name="_ftn12" title="">[12]</a> Ibid. para. 50.</p>
<p></p>
<p id="ftn13">
</p><p class="Footnote"><a href="#_ftnref13" name="_ftn13" title="">[13]</a> Ibid. para. 51.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p>
<p></p>
<p id="ftn14">
</p><p class="Footnote"><a href="#_ftnref14" name="_ftn14" title="">[14]</a> Ibid. para. 52.</p>
<p></p>
<p id="ftn15">
</p><p class="Footnote"><a href="#_ftnref15" name="_ftn15" title="">[15]</a> Ibid. para. 55.</p>
<p></p>
<p id="ftn16">
</p><p class="Footnote"><a href="#_ftnref16" name="_ftn16" title="">[16]</a> Ibid. para. 57.</p>
<p></p>
<p id="ftn17">
</p><p class="Footnote"><a href="#_ftnref17" name="_ftn17" title="">[17]</a> Ibid. para. 58.</p>
<p></p>
<p id="ftn18">
</p><p class="Footnote"><a href="#_ftnref18" name="_ftn18" title="">[18]</a> Rules of the Premier League to be found in the Premier League
Handbook, Season 2017/18, Rule A.1.122.</p>
<p></p>
<p id="ftn19">
</p><p class="Footnote"><a href="#_ftnref19" name="_ftn19" title="">[19]</a> Ibid. Rule F.1.2. This provision in essence corresponds to Article
5.01(b) of the UCL Regulations.</p>
<p></p>
<p id="ftn20">
</p><p class="Footnote"><a href="#_ftnref20" name="_ftn20" title="">[20]</a> Rules of the Premier League, Rule F.1.3.</p>
<p></p>
<p id="ftn21">
</p><p class="Footnote"><a href="#_ftnref21" name="_ftn21" title="">[21]</a> <a href="http://www.csd.gob.es/csd/estaticos/leg-infoinst/A27070-27080.pdf">Royal Decree No 1251/1999</a> on Sports Limited Liability Companies, Article 17(1) and
(2). Professional football competitions at the state level include only La Liga
and Segunda División A.</p>
<p></p>
<p id="ftn22">
</p><p class="Footnote"><a href="#_ftnref22" name="_ftn22" title="">[22]</a> See CFCB Adjudicatory Chamber decision (n 8) para. 41.</p>
<p></p>
<p id="ftn23">
</p><p class="Footnote"><a href="#_ftnref23" name="_ftn23" title="">[23]</a> Such examples could only be inferred from the changes made by RB
Salzburg.</p>
<p></p>
<p></p>
http://www.asser.nl/SportsLaw/Blog/post/multi-club-ownership-in-european-football-part-ii-the-concept-of-decisive-influence-in-the-red-bull-case-by-tomas-grell
http://www.asser.nl/SportsLaw/Blog/post/multi-club-ownership-in-european-football-part-ii-the-concept-of-decisive-influence-in-the-red-bull-case-by-tomas-grell#commenthttp://www.asser.nl/SportsLaw/Blog/post.aspx?id=bf5750dc-7d79-43cb-914b-01156cab0e72Wed, 25 Oct 2017 17:10:00 +0100BlogInternational Sports Law CasesInternational Sports Law CommentariesAntoine Duvalhttp://www.asser.nl/SportsLaw/Blog/pingback.axdhttp://www.asser.nl/SportsLaw/Blog/post.aspx?id=bf5750dc-7d79-43cb-914b-01156cab0e720http://www.asser.nl/SportsLaw/Blog/trackback.axd?id=bf5750dc-7d79-43cb-914b-01156cab0e72http://www.asser.nl/SportsLaw/Blog/post/multi-club-ownership-in-european-football-part-ii-the-concept-of-decisive-influence-in-the-red-bull-case-by-tomas-grell#commenthttp://www.asser.nl/SportsLaw/Blog/syndication.axd?post=bf5750dc-7d79-43cb-914b-01156cab0e72Multi-Club Ownership in European Football – Part I: General Introduction and the ENIC Saga – By Tomáš Grell<strong>Editor’s note:</strong>
Tomáš Grell holds an LL.M.
in&nbsp;Public International Law from Leiden University.&nbsp;He contributes to
the work of the ASSER International Sports Law Centre as a research
intern.<br>
<p class="MsoNormal">&nbsp;</p>
<p class="MsoNormal" align="justify"><u><b>Introduction</b></u></p>
<p class="MsoNormal" align="justify">On
13 September 2017, more than 40,000 people witnessed the successful debut of
the football club RasenBallsport Leipzig (<b><i>RB Leipzig</i></b>) in the UEFA Champions
League (<b><i>UCL</i></b>) against AS Monaco. In the eyes of many supporters of the
German club, the mere fact of being able to participate in the UEFA's flagship
club competition was probably more important than the result of the game
itself. This is because, on the pitch, RB Leipzig secured their place in the
2017/18 UCL group stage already on 6 May 2017 after
an away win against Hertha Berlin.
However, it was not until 16 June 2017 that the UEFA Club Financial Control
Body (<b><i>CFCB</i></b>) <a href="http://www.uefa.com/MultimediaFiles/Download/OfficialDocument/uefaorg/ClubFinancialControl/02/48/50/34/2485034_DOWNLOAD.pdf">officially allowed</a> RB Leipzig to participate in the 2017/18 UCL alongside its sister club,
Austrian giants FC Red Bull Salzburg (<b><i>RB Salzburg</i></b>).<a href="#_ftn1" name="_ftnref1" title="">[1]</a>
As is well known, both clubs have (had) ownership links to the beverage company
Red Bull GmbH (<b><i>Red Bull</i></b>), and therefore it came as no surprise that the idea
of two commonly owned clubs participating in the same UCL season raised
concerns with respect to the competition's integrity. <br></p>
<p class="MsoNormal" align="justify">The
phenomenon of multi-club ownership is nothing new in the world of football. As
will be seen below, the English company ENIC plc. (<b><i>ENIC</i></b>)<a href="#_ftn2" name="_ftnref2" title="">[2]</a>
established itself as a pioneer in this type of business activity, having
acquired in the late 1990s, through subsidiaries, controlling interests in
several European clubs, including SK Slavia Prague in the Czech Republic (<b><i>Slavia</i></b>),
AEK Football Club in Greece (<b><i>AEK</i></b>) or Vicenza Calcio in Italy (<b><i>Vicenza</i></b>).
Apart from ENIC and Red Bull, a more recent example of a global corporation
investing in multiple football clubs worldwide is the City Football Group owned
by Sheikh Mansour bin Zayed Al Nahyan. In August 2017, the City Football Group <a href="https://www.theguardian.com/football/2017/aug/29/girona-manchester-city-pep-guardiola-brother-questions">acquired 44.3% stake in Girona FC</a>, a Spanish club that had just been
promoted to La Liga for the first time in their history, thereby adding a sixth
club to its portfolio consisting of Manchester City, New York City, Melbourne
City, Yokohama Marinos<a href="#_ftn3" name="_ftnref3" title="">[3]</a>
(Japan) and Club Atlético Torque (Uruguay).<a href="#_ftn4" name="_ftnref4" title="">[4]</a>
Private individuals may also become owners of two or more football clubs, the
most prominent examples being <a href="http://www.byfarthegreatestteam.com/posts/definitive-guide-multi-club-ownership-episode-1-introduction-pozzos/">Giampaolo Pozzo and his son Gino</a> who are in possession of the Italy's second
oldest club Udinese Calcio and the English top-flight club Watford FC
respectively,<a href="#_ftn5" name="_ftnref5" title="">[5]</a>
or <a href="http://www.byfarthegreatestteam.com/posts/definitive-guide-multi-club-ownership-episode-6-roland-duchatelet/">Roland Duchâtelet</a>, a Belgian millionaire whose dubious management of
his five clubs, namely Charlton Athletic (England), Carl Zeiss Jena (Germany),
AD Alcorcón (Spain), Sint-Truiden (Belgium) and Újpest FC (Hungary), has been
met with considerable opposition. Moreover, clubs themselves have acquired
stakes in other clubs, including, for instance, <a href="http://www.byfarthegreatestteam.com/posts/definitive-guide-multi-club-ownership-episode-4-atletico-madrid/">Atlético Madrid's investment</a> in RC Lens (France) and Club Atlético de San Luis (Mexico), or <a href="http://www.insideworldfootball.com/2017/05/09/monaco-buy-belgiums-club-brugge-develop-talent-target-top-division/">AS Monaco's recent takeover</a> of the Belgian second-division club Cercle
Brugge.</p>
<p class="MsoNormal" align="justify">Leaving commercial and marketing aspects aside, the investment in
multiple football clubs is often driven by the vision of recruiting talented
players at low cost, preferably in Latin American or African countries, and
subsequently facilitating their development in smaller European clubs to
prepare them for the level required at the lead club. Hence, should Manchester
City discover in Uruguay a 'new Luis Suárez', it will not take much effort (and
money) to convince such a player to join the academy of Club Atlético Torque, especially if
he is promised further development at language-barrier-free Girona and sees
himself wearing the Citizens' sky blue shirt one day. Along these lines, it
could well be argued that the phenomenon of multi-club ownership in fact
creates a supply chain for talent. </p>
<p class="MsoNormal" align="justify">For reasons suggested above, qualification for a UEFA club competition is
normally not the primary objective of clubs like Girona, which find themselves
somewhere in the middle of this supply chain. This at least partially explains
why, to the best of my knowledge, only twice the prospect of two or more
commonly owned clubs participating in the same UEFA club competition became so
imminent that it required UEFA's direct intervention. The first intervention
dates back to May 1998 when the UEFA Executive Committee adopted a landmark
rule entitled 'Integrity of the UEFA Club Competitions: Independence of the
Clubs' (<b><i>Original Rule</i></b>) in
response to Slavia and AEK, both under ENIC's control, having qualified for the
1998/99 UEFA Cup. The Red Bull case, for its part, revolved around the
interpretation of 'decisive influence in the decision-making of a club', a
concept that could not be found in the Original Rule.</p>
<p class="MsoNormal" align="justify">Against this
background, this two-part blog will focus on the UEFA rule(s) aimed at ensuring
the integrity of its club competitions. The first part will take a closer look
at how the Court of Arbitration for Sport (<b><i>CAS</i></b>) and the European Commission (<b><i>Commission</i></b>)
dealt with ENIC's complaints alleging that the Original Rule was incompatible, <i>inter alia</i>, with EU competition law. The
second part will then examine the relevant rule as it is currently enshrined in
Article 5 of the <a href="http://www.uefa.com/MultimediaFiles/Download/Regulations/uefaorg/Regulations/02/46/71/38/2467138_DOWNLOAD.pdf">UCL Regulations 2015-18 Cycle, 2017/18 Season</a> (<b><i>Current Rule</i></b>) and describe how the
CFCB Adjudicatory Chamber interpreted the aforementioned concept of <i>decisive influence</i><a href="#_ftn6" name="_ftnref6" title="">[6]</a> in
the Red Bull case. Finally, in light of the conclusions reached by the CFCB
Adjudicatory Chamber, the second part of this two-part blog will discuss
whether any modification of the Current Rule is desirable.</p>
<p class="MsoNormal" align="justify">&nbsp;</p>
<p class="MsoNormal" align="justify"><u><b>The ENIC saga: How the Original Rule survived EU
competition law scrutiny</b></u></p>
<p class="MsoNormal" align="justify"><b><i>Background</i></b></p>
<p class="MsoNormal" align="justify">It has already been
noted that the adoption of the Original Rule was prompted, first and foremost,
by the fact that ENIC-controlled Slavia and AEK qualified on sporting merit for
the 1998/99 UEFA Cup. However, what needs to be added is that the initial impulse
came a season before, when Slavia, AEK and Vicenza all reached the
quarter-final of the UEFA Cup Winners' Cup. Although UEFA was fortunate that
time as the clubs were not drawn to play against each other and only Vicenza
advanced to the semi-final, it learnt its lesson and as a result of this
situation adopted robust rules aimed at ensuring the integrity of its club
competitions.</p><p class="MsoNormal" align="justify"><i><b>The Original Rule</b></i></p>
<p class="MsoNormal" align="justify">The Original Rule made
admission to the UEFA club competitions conditional upon fulfilment of three
specific criteria. First, a <i>club </i>participating
in a UEFA club competition must have refrained from (i) holding or dealing in
the securities or shares; (ii) being a member; (iii) being involved in any
capacity whatsoever in the management, administration, and/or sporting
performance; and (iv) having any power whatsoever in the management,
administration and/or sporting performance of any other club participating in
the same<i> </i>UEFA club competition.
Second, the Original Rule stipulated that no <i>person </i>could be simultaneously involved in any capacity whatsoever
in the management, administration and/or sporting performance of more than one
club participating in the same<i> </i>UEFA
club competition. Third, an <i>individual</i>
or <i>legal entity</i> was prohibited from
exercising control over more than one club participating in the same UEFA club
competition. The Original Rule further clarified that an individual or legal
entity<i> </i>was deemed to have <i>control</i> over a club, and thus the third
criterion was not satisfied, where he/she/it (i) held a majority of the
shareholders' voting rights; (ii) was authorized to appoint or remove a
majority of the members of the administrative, management or supervisory body;
or (iii) was a shareholder and single-handedly controlled a majority of the
shareholders' voting rights. In principle, under this third criterion, it was
permissible for an individual or legal entity to hold up to 49% of the
shareholders' voting rights in multiple clubs participating in the same UEFA
club competition.</p>
<p class="MsoNormal" align="justify"><b><i>Proceedings before the CAS</i></b></p>
<p class="MsoNormal" align="justify">It was the third criterion that was applicable to ENIC, a company listed
on the London Stock Exchange. Given that both Slavia and AEK were owned as to
more than 50% by ENIC, the respective criterion was not satisfied.
Consequently, the Committee for the UEFA Club Competitions, a body responsible
for monitoring fulfilment of the aforementioned criteria, ruled that only
Slavia was eligible to take part in the 1998/99 UEFA Cup on account of its
higher <i>club coefficient</i>. Not content
with this decision, Slavia and AEK filed a request for arbitration with the CAS
on 15 June 1998, challenging the validity of the Original Rule, <i>inter alia</i>, under Articles 81 and 82 of
the Treaty Establishing the European Community (<b><i>TEC</i></b>) (now Articles 101
and 102 of the Treaty on the Functioning of the European Union (<b><i>TFEU</i></b>)).
On the same day, the clubs also lodged a request for interim relief which was
eventually granted on 16 July 1998.<a href="#_ftn7" name="_ftnref7" title="">[7]</a> As
a result, UEFA was barred from giving effect to the Original Rule for the
duration of the arbitration procedure and both Slavia and AEK were given the
green light to participate in the 1998/99 UEFA Cup. On 20 August 1999, the CAS
rendered its <a href="https://jurisprudence.tas-cas.org/Shared%20Documents/200.pdf">award</a> in which it upheld the
validity of the Original Rule and allowed UEFA to apply the rule in question as
of the 2000/01 season. </p>
<p class="MsoNormal" align="justify">Before embarking on a
comprehensive analysis of the compatibility of the Original Rule with EU
competition law, the Panel recognized that participation of two or more
commonly owned clubs in the same UEFA club competition creates fertile ground
for conflicts of interest, and thus ''<i>represents
a justified concern for a sports regulator and organizer</i>''.<a href="#_ftn8" name="_ftnref8" title="">[8]</a>
The Panel then confirmed that EU law was applicable to the case before it as
the Original Rule could not benefit from any 'sporting
exception'.<a href="#_ftn9" name="_ftnref9" title="">[9]</a>
That being clarified, the Panel moved on to examine the relevant market
potentially affected by the Original Rule. It defined the relevant product
market as the ''<i>market for ownership
interests in football clubs capable of taking part in UEFA competitions</i>''
which would include, on the supply side, ''<i>all
the owners of European football clubs which can potentially qualify for a UEFA
competition</i>'', and, on the demand side, ''<i>any individual or corporation potentially interested in an investment
opportunity in a football club which could qualify for a UEFA competition</i>''.<a href="#_ftn10" name="_ftnref10" title="">[10]</a>
The relevant geographic market, for its part, was confined to the territories
of national football federations affiliated to UEFA.<a href="#_ftn11" name="_ftnref11" title="">[11]</a></p>
<p class="MsoNormal" align="justify"><u><i>Analysis under Article 81 TEC</i></u></p>
<p class="MsoNormal" align="justify">Article 81 TEC (now Article 101 TFEU) prohibits ''<i>all agreements between undertakings, decisions by associations of
undertakings and concerted practices which</i> […] <i>have as their object or effect the prevention, restriction or distortion
of competition within the internal market</i>''. While it is evident that UEFA
could be classified as an undertaking<a href="#_ftn12" name="_ftnref12" title="">[12]</a>
or an association of undertakings (representing national football federations)
within the meaning of Article 81 TEC, it is less clear whether UEFA could also
be regarded, through national football federations representing both
professional and amateur clubs, as an association of 'club undertakings'. This
question is of crucial importance because if UEFA was not to be regarded as an association
of 'club undertakings', the Original Rule would not be considered as the
product of a horizontal collusion between clubs and, as a result, would fall
outside the scope of Article 81 TEC.<a href="#_ftn13" name="_ftnref13" title="">[13]</a>
The role of UEFA in such a case would not go beyond a mere sports regulator.<a href="#_ftn14" name="_ftnref14" title="">[14]</a>
In this context, Advocate General Lenz insisted in the <i>Bosman</i> case that even though national football federations
encompass a sheer number of amateur clubs not engaged in economic activities,
this does not alter the conclusion that (i) national football federations are
to be regarded as associations of undertakings in accordance with Article 81
TEC; and consequently that (ii) UEFA, through these national football
federations, is to be regarded as an association of 'club undertakings'.<a href="#_ftn15" name="_ftnref15" title="">[15]</a> Although
not entirely persuaded by the respective argument, the Panel assumed for the
purposes of conducting an analysis under Article 81 TEC that the Original Rule
represented a decision by an association of 'club undertakings' and, as such,
did not fall outside the scope of Article 81 TEC.<a href="#_ftn16" name="_ftnref16" title="">[16]</a></p>
<p class="MsoNormal" align="justify">The Panel then turned
to the question lying at the heart of the dispute, that is, whether the
Original Rule had as its <i>object </i>or <i>effect</i> the prevention, restriction or
distortion of competition within the internal market. It found that the
Original Rule was only designed to ''<i>prevent
the conflict of interest inherent in commonly owned clubs taking part in the
same competition and to ensure a genuine athletic event with truly uncertain
results</i>'', thereby excluding any anti-competitive <i>object</i> of the Original Rule.<a href="#_ftn17" name="_ftnref17" title="">[17]</a>
With respect to the <i>effect</i> of the
Original Rule, the Panel asserted that even though the rule in question may
have discouraged an owner who had already been in possession of a high-level
European club from acquiring controlling interest in another such club, its
overall effect was pro-competitive in that it enabled more undertakings to
enter the relevant market, and thus stimulated investment in professional
football.<a href="#_ftn18" name="_ftnref18" title="">[18]</a> Moreover, the Panel was
concerned that, in the absence of the Original Rule, high-level European clubs
would potentially be concentrated in few hands which would, in turn, lead to an
increase in prices for ownership interests in those clubs.<a href="#_ftn19" name="_ftnref19" title="">[19]</a> </p>
<p class="MsoNormal" align="justify">Having found that
neither the object nor the effect of the Original Rule was anti-competitive,
the Panel was further not required to pronounce itself on whether the Original
Rule was <i>necessary</i> and <i>proportionate</i> to the legitimate aim
pursued. Yet, it held that the Original Rule was ''<i>an essential feature for the organization of a professional football
competition and</i> [was]<i> not more
extensive than necessary to serve the fundamental goal of preventing conflicts
of interest</i>''.<a href="#_ftn20" name="_ftnref20" title="">[20]</a>
In a similar vein, the Panel could not identify any plausible less restrictive
alternative to the Original Rule, and therefore it declared that the Original
Rule was proportionate to the stated aim of preventing conflicts of interest.<a href="#_ftn21" name="_ftnref21" title="">[21]</a></p>
<p class="MsoNormal" align="justify">Based on the above
considerations, the Panel ultimately concluded that the Original Rule was
compatible with Article 81 TEC.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p>
<p class="MsoNormal" align="justify"><u><i>Analysis under Article 82 TEC</i>&nbsp;
</u></p><p class="MsoNormal" align="justify">Article 82 TEC (now
Article 102 TFEU) prohibits abusive conduct by companies that have a dominant
position on a relevant market. Since UEFA cannot become an owner of a football
club, the Panel maintained that it was not present on the relevant market for
'ownership interests in football clubs capable of taking part in UEFA
competitions', and for that reason UEFA could not be held to enjoy a dominant
position.<a href="#_ftn22" name="_ftnref22" title="">[22]</a> Accordingly, the Panel
concluded that the Original Rule did not violate Article 82 TEC.&nbsp;&nbsp; </p>
<p class="MsoNormal" align="justify"><b><i>Proceedings before the Commission</i></b> </p>
<p class="MsoNormal" align="justify">In the wake of the CAS award, ENIC's business strategy suffered a blow.
However, the English company was not yet ready to give up and lodged a
complaint with the Commission on 18 February 2000, again claiming that the
Original Rule infringed Articles 81 and 82 TEC.</p>
<p class="MsoNormal" align="justify">In its <a href="http://ec.europa.eu/competition/antitrust/cases/dec_docs/37806/37806_7_3.pdf">decision</a>, the Commission relied
to some extent on the CAS award, adopting the definition of the relevant market
or confirming that the Original Rule could not benefit from any 'sporting
exception'. As far as the <i>object</i> of
the Original Rule was concerned, the Commission articulated that the rule was
not intended to distort competition, but rather to ''<i>avoid conflicts of interest that may arise from the fact that more than
one club controlled by the same owner</i> […] <i>play in the same competition</i>''.<a href="#_ftn23" name="_ftnref23" title="">[23]</a>
With respect to the Original Rule's <i>effect</i>,
the Commission referred to the <i>Wouters</i>
case in which the European Court of Justice held that an agreement between
undertakings or a decision of an association of undertakings restricting the
freedom to act may nevertheless fall outside the scope of Article 81 TEC,
provided that its restrictive effects are inherent in the pursuit of a
legitimate objective.<a href="#_ftn24" name="_ftnref24" title="">[24]</a>
Applied to the case before it, the Commission ruled that the restrictive
effects of the Original Rule were ''<i>inherent
in the pursuit of the very existence of credible pan-European football competitions</i>''.<a href="#_ftn25" name="_ftnref25" title="">[25]</a>
Consequently, the Commission found no violation of Article 81 TEC. Turning to
Article 82 TEC, the Commission briefly noted that ''<i>if one were to assume that UEFA enjoys a dominant position in whatever
market, the fact that UEFA has adopted such a rule does not appear to
constitute in itself an abuse of dominant position</i>''.<a href="#_ftn26" name="_ftnref26" title="">[26]</a></p><p class="MsoNormal" align="justify"><a href="#_ftn26" name="_ftnref26" title=""><br></a></p>
<p class="MsoNormal" align="justify"><u><b>Conclusion</b></u></p>
<p class="MsoNormal" align="justify">It is quite intuitive
that the aim of preserving the integrity of the UEFA club competitions should
outweigh the restriction introduced by the Original Rule which essentially
rendered owners of high-level European clubs unable to acquire controlling
interests in similar clubs. However, the fact that the Original Rule appeared
bullet-proof under EU competition law does not mean that it was entirely
without flaws. As will be seen in the second part of this blog, UEFA later
decided to make the Original Rule more stringent since it realized that even if
an individual or legal entity does not have <i>de
jure</i> control over a club, it may still be able to exercise <i>de facto</i> control over such club.</p>
<hr align="justify" size="1" width="33%">
<p id="ftn1" align="justify">
</p><p class="Footnote" align="justify"><a href="#_ftnref1" name="_ftn1" title="">[1]</a> &nbsp; RB Salzburg were eliminated by HNK Rijeka in the third qualifying
round.</p>
<p align="justify"></p>
<p id="ftn2" align="justify">
</p><p class="Footnote" align="justify"><a href="#_ftnref2" name="_ftn2" title="">[2]</a> &nbsp; ENIC is currently a majority shareholder of the English top-flight
club Tottenham Hotspur.</p>
<p align="justify"></p>
<p id="ftn3" align="justify">
</p><p class="Footnote" align="justify"><a href="#_ftnref3" name="_ftn3" title="">[3]</a> &nbsp; Among the clubs listed, Yokohama Marinos is the only club in which
the City Football Group holds a minority stake (20%). </p>
<p align="justify"></p>
<p id="ftn4" align="justify">
</p><p class="Footnote" align="justify"><a href="#_ftnref4" name="_ftn4" title="">[4]</a> &nbsp; Furthermore, Manchester City have a formal <a href="http://www.skysports.com/football/news/11679/10242692/nac-breda-announce-partnership-with-manchester-city">cooperation agreement</a> with Dutch side NAC
Breda.</p>
<p align="justify"></p>
<p id="ftn5" align="justify">
</p><p class="Footnote" align="justify"><a href="#_ftnref5" name="_ftn5" title="">[5]</a> &nbsp; The Pozzo family also owned Spanish side <a href="http://www.watfordobserver.co.uk/sport/14557931.Watford_owner_Gino_Pozzo_sells_Granada_to_Link_International_Sports/">Granada FC</a>, before selling the
club to a Chinese firm in 2016.</p>
<p align="justify"></p>
<p id="ftn6" align="justify">
</p><p class="Footnote" align="justify"><a href="#_ftnref6" name="_ftn6" title="">[6]</a> &nbsp; UCL Regulations 2015-18 Cycle, 2017/18 Season, Article 5.01(c)(iv).
</p>
<p align="justify"></p>
<p id="ftn7" align="justify">
</p><p class="Footnote" align="justify"><a href="#_ftnref7" name="_ftn7" title="">[7]</a> &nbsp; According to the CAS, the fact that UEFA enacted the Original Rule
shortly before the start of the 1998/99 season contravened the principles of
good faith, procedural fairness and legitimate expectations. See CAS 98/200 <i>AEK Athens and SK Slavia Prague / UEFA</i>,
Award of 20 August 1999, p. 5.</p>
<p align="justify"></p>
<p id="ftn8" align="justify">
</p><p class="Footnote" align="justify"><a href="#_ftnref8" name="_ftn8" title="">[8]</a> &nbsp; CAS 98/200 <i>AEK Athens and SK
Slavia Prague / UEFA</i>, Award of 20 August 1999, para. 48.</p>
<p align="justify"></p>
<p id="ftn9" align="justify">
</p><p class="Footnote" align="justify"><a href="#_ftnref9" name="_ftn9" title="">[9]</a> &nbsp; Ibid. para. 83. According to the well-established jurisprudence of
the European Court of Justice, ''<i>the practice of sport </i><i>is subject to</i> [EU]<i>
law only in </i><i>so far as it constitutes an economic
activity</i>''. See
Case 36/74 <a href="http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:61974CJ0036&amp;from=EN"><i>Walrave</i></a> [1974] ECR 1405,
Judgment of 12 December 1974, para. 4. See also Case C-415/93 <a href="http://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:61993CJ0415&amp;from=NL"><i>Bosman</i></a> [1995] ECR I-4921,
Judgment of 15 December 1995, para. 73. On the 'sporting exception', see also
Richard Parrish and Samuli Miettinen, <a href="http://www.asser.nl/asserpress/books/?rId=4294"><i>The Sporting
Exception in European Union Law</i></a> (T.M.C. Asser Press 2008).</p>
<p align="justify"></p>
<p id="ftn10" align="justify">
</p><p class="Footnote" align="justify"><a href="#_ftnref10" name="_ftn10" title="">[10]</a> <i>AEK Athens and SK Slavia
Prague / UEFA</i> (n 8) paras 101-104. </p>
<p align="justify"></p>
<p id="ftn11" align="justify">
</p><p class="Footnote" align="justify"><a href="#_ftnref11" name="_ftn11" title="">[11]</a> Ibid. para. 108.</p>
<p align="justify"></p>
<p id="ftn12" align="justify">
</p><p class="Footnote" align="justify"><a href="#_ftnref12" name="_ftn12" title="">[12]</a> According to the European Court of Justice, ''<i>the concept of an undertaking encompasses every entity engaged in an
economic activity, regardless of the legal status of the entity and the way in
which it is financed</i>''. See Case C-41/90 <a href="http://eur-lex.europa.eu/resource.html?uri=cellar:1689d986-8f43-4ecc-a389-bb324927dfc5.0002.06/DOC_1&amp;format=PDF"><i>Höfner</i></a> [1991] ECR I-1979,
Judgment of 23 April 1991, para. 21.</p>
<p align="justify"></p>
<p id="ftn13" align="justify">
</p><p class="Footnote" align="justify"><a href="#_ftnref13" name="_ftn13" title="">[13]</a> <i>AEK Athens and SK Slavia
Prague / UEFA</i> (n 8) para. 88.</p>
<p align="justify"></p>
<p id="ftn14" align="justify">
</p><p class="Footnote" align="justify"><a href="#_ftnref14" name="_ftn14" title="">[14]</a> Ibid.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </p>
<p align="justify"></p>
<p id="ftn15" align="justify">
</p><p class="Footnote" align="justify"><a href="#_ftnref15" name="_ftn15" title="">[15]</a> <i>Bosman</i>, <a href="http://curia.europa.eu/juris/showPdf.jsf?docid=99458&amp;doclang=EN">Opinion of Advocate General Lenz</a> delivered on 20
September 1995, para. 256.</p>
<p align="justify"></p>
<p id="ftn16" align="justify">
</p><p class="Footnote" align="justify"><a href="#_ftnref16" name="_ftn16" title="">[16]</a> <i>AEK Athens and SK Slavia
Prague / UEFA</i> (n 8) para. 94.</p>
<p align="justify"></p>
<p id="ftn17" align="justify">
</p><p class="Footnote" align="justify"><a href="#_ftnref17" name="_ftn17" title="">[17]</a> Ibid. para. 113.</p>
<p align="justify"></p>
<p id="ftn18" align="justify">
</p><p class="Footnote" align="justify"><a href="#_ftnref18" name="_ftn18" title="">[18]</a> Ibid. paras 114-119.</p>
<p align="justify"></p>
<p id="ftn19" align="justify">
</p><p class="Footnote" align="justify"><a href="#_ftnref19" name="_ftn19" title="">[19]</a> Ibid.</p>
<p align="justify"></p>
<p id="ftn20" align="justify">
</p><p class="Footnote" align="justify"><a href="#_ftnref20" name="_ftn20" title="">[20]</a> Ibid. para. 136.</p>
<p align="justify"></p>
<p id="ftn21" align="justify">
</p><p class="Footnote" align="justify"><a href="#_ftnref21" name="_ftn21" title="">[21]</a> Ibid.</p>
<p align="justify"></p>
<p id="ftn22" align="justify">
</p><p class="Footnote" align="justify"><a href="#_ftnref22" name="_ftn22" title="">[22]</a> Ibid. para. 141. It should be noted, however, that this assertion
was later challenged, albeit in the context of FIFA, by the Court of First
Instance in the <i>Piau</i> case. The Court
held in this case that the fact that FIFA is not itself an economic operator on
the market for the services provided by players' agents was <i>''irrelevant as regards the application of
Article 82 TEC, since FIFA is the emanation of the national associations and
the clubs, the actual buyers of the services of players' agents</i>''. See Case
T-193/02 <a href="http://curia.europa.eu/juris/showPdf.jsf?text=&amp;docid=49878&amp;pageIndex=0&amp;doclang=EN&amp;mode=lst&amp;dir=&amp;occ=first&amp;part=1&amp;cid=1556017"><i>Piau</i></a><i> </i>[2005] ECLI:EU:T:2005:22, Judgment of 26 January 2005, para.
116. </p>
<p align="justify"></p>
<p id="ftn23" align="justify">
</p><p class="Footnote" align="justify"><a href="#_ftnref23" name="_ftn23" title="">[23]</a> Case COMP/37 806: <i>ENIC / UEFA </i>[2002]
Commission, para. 28.</p>
<p align="justify"></p>
<p id="ftn24" align="justify">
</p><p class="Footnote" align="justify"><a href="#_ftnref24" name="_ftn24" title="">[24]</a> Case C-309/99 <a href="http://curia.europa.eu/juris/showPdf.jsf?text=&amp;docid=46722&amp;pageIndex=0&amp;doclang=EN&amp;mode=lst&amp;dir=&amp;occ=first&amp;part=1&amp;cid=343134"><i>Wouters</i></a> [2002] ECR I-1577,
Judgment of 19 February 2002, para. 97.</p>
<p align="justify"></p>
<p id="ftn25" align="justify">
</p><p class="Footnote" align="justify"><a href="#_ftnref25" name="_ftn25" title="">[25]</a> See Commission decision (n 23) para. 32.</p>
<p align="justify"></p>
<p id="ftn26" align="justify">
</p><p class="Footnote" align="justify"><a href="#_ftnref26" name="_ftn26" title="">[26]</a> Ibid. para. 45.</p>
<p></p>
<p></p>
http://www.asser.nl/SportsLaw/Blog/post/multi-club-ownership-in-european-football-part-i-general-introduction-and-the-enic-saga-by-tomas-grell
http://www.asser.nl/SportsLaw/Blog/post/multi-club-ownership-in-european-football-part-i-general-introduction-and-the-enic-saga-by-tomas-grell#commenthttp://www.asser.nl/SportsLaw/Blog/post.aspx?id=4d7f8e39-d313-4898-94e5-299cc5099438Tue, 24 Oct 2017 10:10:00 +0100BlogInternational Sports Law CasesInternational Sports Law CommentariesAntoine Duvalhttp://www.asser.nl/SportsLaw/Blog/pingback.axdhttp://www.asser.nl/SportsLaw/Blog/post.aspx?id=4d7f8e39-d313-4898-94e5-299cc50994381http://www.asser.nl/SportsLaw/Blog/trackback.axd?id=4d7f8e39-d313-4898-94e5-299cc5099438http://www.asser.nl/SportsLaw/Blog/post/multi-club-ownership-in-european-football-part-i-general-introduction-and-the-enic-saga-by-tomas-grell#commenthttp://www.asser.nl/SportsLaw/Blog/syndication.axd?post=4d7f8e39-d313-4898-94e5-299cc5099438International and European Sports Law – Monthly Report – September 2017. By Tomáš Grell
<p class="MsoNormal"><b>Editor's note:</b> This report compiles all relevant news, events and
materials on International and European Sports Law based on the daily coverage
provided on our twitter feed <a href="https://twitter.com/sportslaw_asser">@Sportslaw_asser.</a> You
are invited to complete this survey via the comments section below, feel free
to add links to important cases, documents and articles we might have
overlooked.
</p><p class="MsoNormal"><b>&nbsp;</b></p>
<p class="MsoNormal"><b>The Headlines</b>&nbsp;
</p><p class="MsoNormal"><i><u>2024 and 2028 Olympic Games to be held in Paris and
Los Angeles respectively</u></i></p>
<p class="MsoNormal">On 13 September 2017,
the Session of the International Olympic Committee (<b><i>IOC</i></b>) held in Lima, Peru, <a href="https://www.olympic.org/news/ioc-makes-historic-decision-by-simultaneously-awarding-olympic-games-2024-to-paris-and-2028-to-los-angeles">elected</a> Paris and Los Angeles as host cities of the 2024 and
2028 Olympic Games respectively. On this occasion, the IOC President Thomas
Bach said that ''<i>this historic double
allocation is a 'win-win-win' situation for the city of Paris, the city of Los
Angeles and the IOC</i>''. The idea of a tripartite agreement whereby two
editions of the Olympic Games would be awarded at the same time was presented
by a working group of the IOC Vice-Presidents established in March 2017. Both
Paris and Los Angeles have pledged to make the Olympic Games cost-efficient, in
particular through the use of a record-breaking number of existing and
temporary facilities. In addition to economic aspects, it will be worthwhile to
keep an eye on how both cities will address human rights and other similar concerns
that may arise in the run-up to the Olympic Games.&nbsp;</p><p class="MsoNormal"><i><u>FIFA President accused of interfering with the work of
the FIFA Governance Committee</u></i></p>
<p class="MsoNormal">On 13 September
2017, Miguel Maduro, a former Chair of the FIFA Governance Committee who was <a href="https://www.ft.com/content/79ed66e2-3504-11e7-bce4-9023f8c0fd2e?mhq5j=e7">summarily dismissed in May 2017</a>, appeared in the UK House of Commons to give <a href="https://www.theguardian.com/football/2017/sep/13/fifa-gianni-infantino-governance-committee-vitaly-mutko">testimony</a> on the undue influence that FIFA's President Gianni
Infantino allegedly exerted over the work of the Governance Committee. Most
importantly, Maduro claimed that Infantino attempted to interfere with the
Governance Committee's decision to bar Vitaly Mutko, a Deputy Prime Minister of
Russia, from sitting on the FIFA Council. The former Chair of the Governance
Committee commented that Infantino ''<i>chose
to politically survive</i>'' and carried on to assert that FIFA has a ''<i>deeply embedded structure that is extremely
resistant to independent scrutiny, transparency and accountability</i>''. FIFA
denied Maduro's accusations, stating that ''<i>exchanges
between the administration and FIFA's committees</i> […] <i>are logical and even desirable, so for these exchanges to be portrayed
as undue influence is factually incorrect</i>''.</p>
<p class="MsoNormal"><i><u>The CAS award in Jersey
Football Association v. UEFA</u></i></p>
<p class="MsoNormal">In its <a href="http://www.tas-cas.org/fileadmin/user_upload/Media_Release_4787.pdf">press release</a> of 28 September 2017, the CAS communicated that it
had delivered an award in the dispute between the Jersey Football Association (<b><i>JFA</i></b>)
and UEFA which emerged from the JFA's application for UEFA membership submitted
in December 2015. The CAS set aside the decision rendered by the UEFA Executive
Committee on 1 September 2016 in which the JFA's application for UEFA
membership was rejected, and ordered that the respective application be
forwarded to the UEFA Congress for consideration. In view of the CAS, it is the
UEFA Congress and not the UEFA Executive Committee that is competent to
consider membership applications. It should be stressed, however, that the CAS
dismissed the JFA's request to ''<i>take all
necessary measures to admit the JFA as a full member of UEFA without delay</i>'',
noting that the UEFA Congress has discretionary powers to admit new members. In
this regard, the CAS further held that, on the basis of the evidence provided,
it appeared that the JFA did not satisfy the requirements for UEFA membership
laid down in Article 5(1) of the <a href="http://www.uefa.com/MultimediaFiles/Download/OfficialDocument/uefaorg/WhatUEFAis/02/50/26/15/2502615_DOWNLOAD.pdf">UEFA Statutes</a>.</p>
<p class="MsoNormal">&nbsp;</p>
<p class="MsoNormal"><b>Official Documents and Press Releases</b></p>
<ul><li>CAS – <a href="http://www.tas-cas.org/fileadmin/user_upload/Media_Release_4787.pdf">The CAS rules on the case Jersey Football Association
v. UEFA</a></li><li>Human
Rights Now – <a href="http://hrn.or.jp/eng/news/2017/09/12/joint-letters-tokyo-olympics-construction/">Letters demanding that Olympic authorities end
rainforest destruction and human rights abuses connected to Tokyo 2020 Olympics
construction</a></li><li>Human Rights Watch – <a href="https://www.hrw.org/news/2017/09/27/qatar-take-urgent-action-protect-construction-workers">Qatar: Take urgent action to protect construction
workers</a></li><li>IOC – <a href="https://www.olympic.org/news/declaration-of-the-ioc-executive-board-in-lima">Declaration of the IOC Executive Board in Lima</a></li><li>IOC – <a href="https://hub.olympic.org/wp-content/uploads/2017/09/IOC-Athletes-Commission-Strategy-All-In-September-2017-For-IOC-EB-approval-1.pdf">IOC Athletes' Commission Strategy</a></li><li>IOC –<b> </b><a href="https://www.olympic.org/news/ioc-makes-historic-decision-by-simultaneously-awarding-olympic-games-2024-to-paris-and-2028-to-los-angeles">IOC makes historic decision by simultaneously awarding
Olympic Games 2024 to Paris and 2028 to Los Angeles</a></li><li>IOC –<b> </b><a href="https://stillmed.olympic.org/media/Document%20Library/OlympicOrg/Games/Summer-Games/2028-Los-Angeles/IOC-2028-Evaluation-Commission-report.pdf#_ga=2.172587171.1453457232.1507661397-399469983.1491509727">Report of the IOC 2028 Evaluation Commission</a></li><li>UEFA – <a href="http://www.uefa.com/insideuefa/mediaservices/mediareleases/newsid=2502743.html">13<sup>th</sup> Extraordinary UEFA Congress decisions</a></li><li>UEFA – <a href="http://www.uefa.com/insideuefa/about-uefa/organisation/congress/news/newsid=2502802.html#keeping+competitive+balance+aleksander+ceferin">Keeping competitive balance – Aleksander Čeferin</a></li><li>UEFA – <a href="http://www.uefa.com/insideuefa/mediaservices/mediareleases/newsid=2501736.html">Nations League regulations approved</a></li><li>UEFA – <a href="http://www.uefa.com/insideuefa/mediaservices/newsid=2501199.html">UEFA President reflects on a rewarding year of
progress</a></li><li>WADA –<b> </b><a href="https://www.wada-ama.org/sites/default/files/prohibited_list_2018_en.pdf">2018 List of Prohibited Substances and Methods</a></li><li>WADA –<b> </b><a href="https://www.wada-ama.org/sites/default/files/prohibited_list_2018_summary_of_modifications_en.pdf">2018 Summary of major modifications and explanatory
notes</a></li><li>WADA – <a href="https://www.wada-ama.org/en/resources/code-compliance/proposed-international-standard-for-code-compliance-by-signatories-isccs">Proposed International Standard for Code Compliance by
Signatories – Version 2.0</a></li><li>WADA –<b> </b><a href="https://www.wada-ama.org/en/media/news/2017-09/tanzania-ratifies-unesco-anti-doping-convention">Tanzania ratifies UNESCO Anti-Doping Convention</a></li><li>WADA – <a href="https://www.wada-ama.org/en/media/news/2017-09/wada-launches-phase-ii-of-stakeholder-consultation-on-compliance-standard">WADA launches Phase II of stakeholder consultation on
Compliance Standard</a></li><li>WADA –<b> </b><a href="https://www.wada-ama.org/en/media/news/2017-09/wada-provisionally-suspends-accreditation-of-paris-laboratory">WADA provisionally suspends accreditation of Paris
Laboratory</a></li></ul>
<p class="MsoListParagraphCxSpLast"><b>&nbsp;</b></p>
<p class="MsoNormal"><b>In the news</b></p>
<p class="MsoNormal"><i>Doping</i></p>
<ul><li>Associated
Press <a href="http://www.espn.com/olympics/story/_/id/20847506/russian-doping-whistleblower-grigory-rodchenkov-faces-arrest-returns">Russian doping whistleblower faces arrest if he
returns</a></li><li>Sean
Ingle <a href="https://amp.theguardian.com/sport/2017/sep/14/anti-doping-agencies-tell-ioc-ban-russia-2018-winter-olympics">Anti-doping agencies call on IOC to ban Russia from
2018 Winter Olympics</a></li><li>Tariq
Panja <a href="https://www.nytimes.com/2017/09/15/sports/russian-doping-ioc.html">IOC investigation of Russian doping might soon yield
penalties</a></li><li>RT News
<a href="https://www.rt.com/sport/402115-richard-mclaren-denies-dropped-charges/">McLaren denies he 'dropped charges' of state
involvement in doping in Russia</a></li><li>Swimming
World <a href="https://www.swimmingworldmagazine.com/news/update-court-of-arbitration-reduces-sanctions-on-canadian-swimmer-william-brothers/">Court of Arbitration for Sport reduces sanctions on
Canadian swimmer William Brothers</a></li></ul>
<p class="MsoNormal"><i>Football</i></p>
<ul><li>Ed
Aarons <a href="https://www.theguardian.com/football/2017/sep/27/fifa-uefa-tax-evasion-football-meps">FIFA and UEFA accused of being 'enablers' of tax evasion in football by MEPs</a></li><li>CIES
Football Observatory <a href="http://www.football-observatory.com/IMG/sites/b5wp/2017/193/en/">Balance sheets for transfer operations: From Monaco to
Paris St-Germain</a></li><li>David
Conn <a href="https://www.theguardian.com/football/2017/sep/13/fifa-gianni-infantino-governance-committee-vitaly-mutko">FIFA's Infantino accused of interfering with
governance committee decisions</a></li><li>David
Conn <a href="https://www.theguardian.com/football/2017/sep/14/fifa-gianni-infantino-accused-bad-governance-commons-select-committee?CMP=share_btn_tw">FIFA President Gianni Infantino accused of bad
governance by former committee member</a></li><li>Paul Ferguson <a href="http://www.belfasttelegraph.co.uk/sport/football/world-cup/irish-fa-to-ask-fifa-for-money-back-after-poppy-uturn-36168655.html">Irish FA to ask FIFA for money back after poppy u-turn</a></li><li>FIFPro <a href="https://www.fifpro.org/news/danish-women-s-world-cup-conflict-explained/en/">Danish women's World Cup conflict explained</a></li><li>Rob
Harris <a href="https://apnews.com/f2aeb1ea605d4dafb07d568461addd1a?utm_campaign=SocialFlow&amp;utm_source=Twitter&amp;utm_medium=AP_Sports">Spanish league wants UEFA to investigate Man City's
spending</a></li><li>Steve
Menary <a href="http://www.playthegame.org/news/news-articles/2017/0348_tebas-calls-for-european-union-probe-into-neymar-transfer/">Tebas calls for European Union probe into Neymar
transfer</a></li><li>Tariq
Panja <a href="https://www.nytimes.com/2017/09/13/sports/soccer/fifa-gianni-infantino-ethics-complaint.html?mcubz=0">FIFA President Gianni Infantino faces new ethics
complaint</a></li><li>Tariq
Panja <a href="https://www.nytimes.com/2017/09/10/sports/soccer/fifa-infantino-ethics-maduro.html?mcubz=3">Former FIFA official's testimony could raise new
ethics questions</a></li><li>John Percy <a href="http://www.telegraph.co.uk/football/2017/09/25/leicester-city-submit-appeal-fifa-bid-complete-25m-adrien-silva/">Leicester City submit appeal to FIFA in bid to
complete £25 million Adrien Silva signing</a></li><li>Ben
Rumsby <a href="http://www.telegraph.co.uk/football/2017/09/20/chelsea-face-third-fifa-investigation-eight-years-youth-transfer/">Chelsea face second FIFA investigation in eight years
over youth transfer policy</a> <br></li></ul>
<p class="MsoNormal"><i>Other</i></p>
<ul><li>BBC
News <a href="http://www.bbc.com/sport/athletics/41346447">Sergey Bubka: Athletics Integrity Unit looking into
payment to ex-IAAF treasurer</a></li><li>Tim
Daniels <a href="http://bleacherreport.com/articles/2731710-prosecutors-allege-brazils-olympic-committee-conspired-to-buy-ioc-votes">Prosecutors allege Brazil's Olympic Committee
conspired to buy IOC votes</a></li><li>Marina
Hyde <a href="https://www.theguardian.com/sport/blog/2017/sep/06/ioc-rio-2016-corruption-vote-buying">IOC selective blindness continues but Rio 2016 scandal
looks all too familiar</a></li><li>Liam
Morgan <a href="https://www.insidethegames.biz/articles/1055278/ioc-admit-votes-may-have-been-bought-by-diack-in-olympic-games-bidding-process">IOC admit votes may have been bought by Diack in
Olympic Games bidding process</a></li><li>Sebastian
Smith <a href="https://sports.yahoo.com/brazil-police-launch-raids-rio-olympics-vote-buying-003033030--oly.html">Brazil police say Rio Olympics were bought in corrupt
scheme</a></li></ul>
<p class="MsoListParagraphCxSpLast"><br></p>
<p class="MsoNormal"><b>Academic Materials</b></p>
<ul><li>Antoine
Duval and Oskar van Maren <a href="http://journals.sagepub.com/eprint/qVwRQECjQE8kce6EqStK/full">The Labour Status of Professional Football Players in
the European Union: Unity in/and/or Diversity?</a></li></ul><p><br></p>
<p class="MsoNormal"><b>Blog</b></p>
<p class="MsoNormal"><i>Asser International Sports Law Blog</i></p>
<ul><li>Christopher Flanagan <a href="http://www.asser.nl/SportsLaw/Blog/post/the-evolution-of-uefa-s-financial-fair-play-rules-part-1-background-and-eu-law-by-christopher-flanagan">The Evolution of UEFA's Financial Fair Play Rules – Part 1: Background and EU
Law</a></li><li>Christopher Flanagan <a href="http://www.asser.nl/SportsLaw/Blog/post/the-evolution-of-uefa-s-financial-fair-play-rules-part-2-the-legal-challenges-by-christopher-flanagan">The Evolution of UEFA's Financial Fair Play Rules – Part 2: The Legal Challenges</a></li><li>Tomáš Grell <a href="http://www.asser.nl/SportsLaw/Blog/post/fifa-s-human-rights-agenda-is-the-game-beautiful-again-by-tomas-grell">FIFA's Human Rights Agenda: Is the Game Beautiful
Again?</a></li></ul>
<p class="MsoNormal"><i>Law in Sport</i></p>
<ul><li>Jack
Anderson and Neil Partington <a href="https://www.lawinsport.com/articles/item/duty-of-care-in-sport-making-the-case-for-a-sports-ombudsman-in-the-uk">Duty of care in sport: The case for a sports ombudsman
in the UK</a></li><li>Hazar
El-Chamaa <a href="https://www.lawinsport.com/articles/item/the-lifecycle-of-an-international-athlete-part-2-key-immigration-issues-when-entering-the-uk">The lifecycle of an international athlete: Part 2 –
Key immigration issues when entering the UK</a></li><li>Laura
Dadswell <a href="https://www.lawinsport.com/articles/item/the-lifecycle-of-an-international-athlete-part-3-key-uk-income-tax-points-for-non-residents">The lifecycle of an international athlete: Part 3 –
Key UK income tax points for non-residents</a></li><li>Tim
Meakin, Tim Walker and Richard Davies <a href="https://www.lawinsport.com/articles/item/confidential-data-leaks-what-are-the-vicarious-liability-risks-for-sports-organisations">Confidential data leaks: What are the vicarious
liability risks for sports organizations?</a></li><li>John
Mehrzad <a href="https://www.lawinsport.com/articles/item/who-has-jurisdiction-over-international-football-transfer-disputes">Who has jurisdiction over international football
transfer disputes?</a></li><li>Michael
Savva <a href="https://www.lawinsport.com/articles/item/an-update-on-financial-fair-play-case-study-the-neymar-transfer">An update on Financial Fair Play – Case study: The
Neymar transfer</a></li><li>Gavin
Stenton <a href="https://www.lawinsport.com/articles/item/the-lifecycle-of-an-international-athlete-part-4-dealing-with-branding-image-rights?category_id=112">The lifecycle of an international athlete: Part 4 –
Dealing with branding and image rights</a></li></ul>
<p class="MsoNormal"><i>Others</i></p>
<ul><li>James
M. Dorsey <a href="http://playthegame.org/news/comments/2017/047_tackling-the-elephant-in-the-room-the-incestuous-and-inseparable-relationship-between-sports-and-politics/">Tackling the elephant in the room: The incestuous and
inseparable relationship between sports and politics</a></li><li>Simon
Kuper <a href="http://www.nybooks.com/articles/2017/09/28/soccers-culture-of-corruption/">Soccer's culture of corruption</a></li><li>Nick De Marco <a href="https://www.sportslawbulletin.org/new-regulation-football-intermediaries/">New regulation of football intermediaries</a></li></ul>
<p class="MsoListParagraphCxSpLast">&nbsp;</p>
<p class="MsoNormal"><b>Upcoming Events</b></p>
<ul><li>26-27
October – <a href="http://www.asser.nl/SportsLaw/Blog/post/call-for-papers-islj-annual-conference-on-international-sports-law-26-27-october-2017">ISLJ Annual Conference on International Sports Law</a>, T.M.C. Asser Institute, The Hague, the Netherlands [<b>We have only a couple of seats left,
register now!]</b></li></ul>
http://www.asser.nl/SportsLaw/Blog/post/international-and-european-sports-law-monthly-report-september-2017-by-tomas-grell
http://www.asser.nl/SportsLaw/Blog/post/international-and-european-sports-law-monthly-report-september-2017-by-tomas-grell#commenthttp://www.asser.nl/SportsLaw/Blog/post.aspx?id=2c6693ce-055d-4a33-93c4-0ac2634ed701Thu, 19 Oct 2017 12:10:00 +0100BlogInternational Sports Law CasesInternational Sports Law CommentariesInternational Sports Law EventsInternational Sports Law MaterialInternational Sports Law PublicationsAntoine Duvalhttp://www.asser.nl/SportsLaw/Blog/pingback.axdhttp://www.asser.nl/SportsLaw/Blog/post.aspx?id=2c6693ce-055d-4a33-93c4-0ac2634ed7015http://www.asser.nl/SportsLaw/Blog/trackback.axd?id=2c6693ce-055d-4a33-93c4-0ac2634ed701http://www.asser.nl/SportsLaw/Blog/post/international-and-european-sports-law-monthly-report-september-2017-by-tomas-grell#commenthttp://www.asser.nl/SportsLaw/Blog/syndication.axd?post=2c6693ce-055d-4a33-93c4-0ac2634ed701The limits to multiple representation by football intermediaries under FIFA rules and Swiss Law - By Josep F. Vandellos Alamilla<b>Editor’s note</b>: Josep F. Vandellos Alamilla is an
international sports lawyer and academic based in Valencia (Spain) and a member
of the Editorial Board of the publication Football Legal. Since 2017 he is the
Director of&nbsp; the Global Master in Sports
Management and Legal Skills FC Barcelona – ISDE.<br><br>
<p class="MsoNormal" align="justify">I think we would all agree that the reputation of
players’ agents, nowadays called intermediaries, has never been a good one for
plenty of reasons. But the truth is their presence in the football industry is
much needed and probably most of the transfers would never take place if these
outcast members of the self-proclaimed <i>football
family</i> were not there to ensure a fluid and smooth communication between all
parties involved. </p>
<p class="MsoNormal" align="justify">For us, sports lawyers, intermediaries are also
important clients as they often need our advice to structure the deals in which
they take part. One of the most recurrent situations faced by intermediaries and
agents operating off-the-radar (i.e. not registered in any football association
member of FIFA) is the risk of entering in a so-called multiparty or dual representation
and the potential risks associated with such a situation.</p>
<p class="MsoNormal" align="justify">The representation of the interests of multiple
parties in football intermediation can take place for instance when the agent represents
the selling club, the buying club and/or the player in the same transfer, or when
the agent is remunerated by multiple parties, and in general when the agent incurs
the risk of jeopardizing the trust deposited upon him/her by the principal. The
situations are multiple and can manifest in different manners.</p>
<p class="MsoNormal" align="justify">This article will briefly outline the regulatory
framework regarding multiparty representation applicable to registered
intermediaries. It will then focus on provisions of Swiss law and the
identification of the limits of dual representation in the light of the CAS
jurisprudence and some relevant decisions of the Swiss Federal Tribunal.</p>
<p class="MsoNormal" align="justify">&nbsp;</p>
<p class="MsoListParagraph" align="justify">A)&nbsp;&nbsp;
<b><u>Regulatory framework</u></b>:</p>
<p class="MsoNormal" align="justify">Those agents acting in the market as registered
intermediaries will necessarily be subjected to the specific football
regulations enacted by FIFA and the national associations in which they
operate. The answer as to the possibility to represent more than one party to a
deal will therefore, be necessarily found in internal rules of each association.&nbsp; </p>
<p class="MsoNormal" align="justify">As opposed to the obsolete <a href="http://resources.fifa.com/mm/document/affederation/administration/51/55/18/players_agents_regulations_2008.pdf">FIFA
Players’ Agent Regulations</a><a href="#_ftn1" name="_ftnref1" title="">[1]</a>,
the <a href="https://www.fifa.com/mm/document/affederation/administration/02/36/77/63/regulationsonworkingwithintermediariesii_neutral.pdf">FIFA
Regulations on Working with Intermediaries</a> (RWWI) allow intermediaries to
represent more than one party in a transaction. Pursuant to the definition of
intermediary<a href="#_ftn2" name="_ftnref2" title="">[2]</a> in
combination with Article 8 RWWI, the only substantive requirement to intermediaries
willing to act for multiple parties is that they obtain prior written consent
and confirmation in writing on which party (i.e. the player and/or the club)
will remunerate the services of the intermediary. The regulations, therefore, prioritize
transparency over the question of who pays for the services of the intermediary.
Consequently, it is not forbidden for an intermediary to represent and be paid
by multiple parties to a transaction, as long as they all know and agree to it
in advance.&nbsp;&nbsp; </p>
<p class="MsoNormal" align="justify">At a national level, most FIFA member associations<a href="#_ftn3" name="_ftnref3" title="">[3]</a>
have followed the solution adopted in the RWWI and have transposed <i>ad literam </i>the right of intermediaries
to multiparty representation as long as the transparency and information
requirements are met (i.e. any potential conflict of interest is disclosed to
the parties in advance, and subject to the prior written consent of the parties
to the transaction). </p>
<p class="MsoNormal" align="justify">However, there are still many agents that prefer to
operate off-the-radar of organized football and its regulations. For these ‘<i>rogue’ agents</i>, the scenario is different
and the question of the legality of multiparty representation will ultimately
depend on the applicable law chosen by the parties<a href="#_ftn4" name="_ftnref4" title="">[4]</a>.
Based on my personal experience, off-the-radar agents often end up acting
through very rudimentary authorizations subject to the ordinary jurisdiction of
the CAS. For this reason, I chose to dissect in this paper the limits of
multiparty representation according to Swiss law, for based on article XY of
the <a href="http://www.tas-cas.org/en/arbitration/code-procedural-rules.html">CAS
Code of Sports Arbitration</a> it represents the applicable law to ordinary
disputes before the CAS when parties fail to make a particular choice of law.</p>
<p class="MsoNormal" align="justify">The provisions of the contract of brokerage (“<i>contrat de courtage</i>”) in Articles 412-418
of the <a href="https://www.admin.ch/opc/en/classified-compilation/19110009/201704010000/220.pdf">Swiss
Code of Obligations</a> (CO) are of relevance in this regard. The cornerstone
provision concerning <i>conflict of interest</i>
is found in <b>Article 415 CO</b><a href="#_ftn5" name="_ftnref5" title="">[5]</a>
whose English translation reads as follows: </p>
<p class="MsoNormal" align="justify">“<i>Where
the broker acts in the interests of a third party in breach of the contract or
procures a promise of remuneration from such party in circumstances tantamount
to bad faith, he forfeits his right to a fee and to any reimbursement of
expenses</i>”.</p>
<p class="MsoNormal" align="justify">The article differentiates between two non-cumulative
hypothetical situations where the broker (i.e. agent) may be in a position of conflict
of interests. </p>
<ul><li>First:
the broker “<i>Acts in the interest of a
third party <u>in breach of the contract</u></i>”. </li><li>Second:
the broker “<i>Procures a promise of
remuneration from such party <u>in bad faith</u></i>”. </li></ul>
<p class="MsoNormal" align="justify"><b><i>The first hypothesis</i></b> establishes the prohibition of the broker to act in
the interest of a third party if the obligations towards his client are
breached. Accordingly, an agent representing a player is prevented from assisting
the players’ contracting club to negotiate the terms of his employment contract,
as he would be defending irreconcilable interests (i.e. the interest of the
club to pay the lowest salary possible v/ the interest of the player to obtain
the highest possible salary). Conversely, the same agent could be hired by the club
in a different transaction without incurring a conflict of interest with the
player. The condition triggering this first hypothesis will be thus, whether
the agent acting for the third party is in breach of his contractual
obligations. <br></p>
<p class="MsoNormal" align="justify">It is important to note that the published English
translation of the CO differs slightly from the original text of the code<a href="#_ftn6" name="_ftnref6" title="">[6]</a>.
While the English translation refers to the breach of the “<i>contract</i>”, the original French version refers instead to a breach
of the “<i>obligations</i>” which has
obviously a broader scope, covering a wider range of situations than a contract
might include. </p>
<p class="MsoNormal" align="justify">This linguistic difference can be misleading as the
obligations emanating from the CO may go beyond the obligations set forth in a
simple authorization or a brokerage contract. By way of example, think of a
very simple “<i>Authorization</i>” that does
not explicitly prohibit the agent of the player to simultaneously act for the
club. Sticking to literal text of the English translation, one could be tempted
to believe that the agent was not acting in breach of the contract. However, the
same situation seen under the lens of the legal obligations would imply that the
agent could still be infringing the obligation of loyalty and trust stemming
from the CO. </p>
<p class="MsoNormal" align="justify">In view of the above, a correct evaluation of the
first hypothesis will necessarily account for the legal obligations inherent to
the brokerage contract, the scope of which might go beyond the obligations
stipulated in the contract. Amongst these, the obligation of loyalty, the
obligation to safeguard the interest of the client by not entering into conflictive
situations, and the obligation of transparency and information.</p>
<p class="MsoNormal" align="justify"><b><i>The second hypothesis</i></b> covers the prohibition in Swiss law of dual
representation by procuring a promise of payment from third parties to the relationship
broker/principal, if such a promise amounts to bad faith. </p>
<p class="MsoNormal" align="justify">It needs to be underlined that this provision does not
exclude dual payment, but subjects it to a certain limit, i.e. <i>not incurring in bad faith</i>. Delineating
bad faith can turn out to be a difficult task as the concept itself has an inevitable
component of subjectivity and, as opposed to <i>good faith </i>which is legally presumed (cf. Article 3 of the <a href="https://www.admin.ch/opc/fr/classified-compilation/19070042/index.html">Swiss
Civil Code</a>), <i>bad faith</i> must
always be proven by the party claiming it, who ultimately bears the burden of
proof<a href="#_ftn7" name="_ftnref7" title="">[7]</a>.&nbsp; </p><p class="MsoNormal" align="justify">Applied to football agents, it can be safely assumed
that an agent acting in good faith towards his client would necessarily act in
a transparent way and inform his client that he is simultaneously acting for
the other contracting party. Not disclosing such information in the context of
negotiations can serve as indication of bad faith when combined with other
elements. However, to prove the presence of bad faith will still require
sufficient material evidence in order to discharge the burden of proof, since
the simple negligence of the broker would not be sufficient to fall under the
scope of the article.</p>
<p class="MsoNormal" align="justify"><b><i>The consequence</i></b> for a broker (i.e. football agent) infringing the
prohibition of dual representation in he hypotheses described in article 415 CO
is the nullity of the contract and the forfeiture of the right to be
remunerated, or the obligation to reimburse the amounts received if the
infringement is ascertained after the realization of the contract and payment
of the fee (“<i>quod nullum est nullum
producit effectum</i>”). &nbsp;</p>
<p class="MsoNormal" align="justify">With the above premises in mind, a detailed look into
the CAS and the Swiss Federal Tribunal jurisprudence regarding Article 415 CO will
help identifying the scope of the legal obligations of a football agent towards
his client (i.e. club and/or player), as well as the mechanisms used by the
decision-making bodies to determine the existence of bad faith. </p>
<p class="MsoNormal" align="justify">&nbsp;</p>
<p class="MsoListParagraph" align="justify">B)&nbsp;&nbsp;
<b><u>Jurisprudence</u></b>:</p>
<p class="MsoNormal" align="justify">One of the very few CAS cases dealing with Article 415
CO in the context of football agents' relationships with clubs is <a href="http://jurisprudence.tas-cas.org/Shared%20Documents/2988.pdf">the <b>CAS award &nbsp;2012/A/2988 PFC CSKA Sofia v. Loic Bensaid</b></a>.</p>
<p class="MsoNormal" align="justify">In short, the dispute opposed the flagship Bulgarian
football club CSKA Sofia against a French football agent and revolved around
the right of the latter to be remunerated by the club, considering he had acted
simultaneously in representation of the player in the signature of the
employment contract.</p>
<p class="MsoNormal" align="justify">One of the many arguments used by the club in support
of its alleged right not to pay the agent was based on Article 415 CO. The club
asserted that the agent acted in violation of his obligations for having
represented both parties. On the merits, the Sole Arbitrator concluded, nevertheless,
that the agent had fulfilled the obligations of transparency and information as
the Club was aware at all times that the agent also acted for the player and
knew about the existence of the representation contract with the player<a href="#_ftn8" name="_ftnref8" title="">[8]</a>.
The full knowledge and acceptance of the situation impeded the club to contend,
at a later stage, the violation of the duty of loyalty and transparency.</p>
<p class="MsoNormal" align="justify">Secondly, adhering to the grounds of the supporting
FIFA decision, the Sole Arbitrator also remarked that the mandate between the
Agent and the player did not contain any obligation to remunerate the services
of the agent. The prohibition of agents to be remunerated twice for their
services has been traditionally a key element in previous FIFA decisions where
dual representation was at the center of the dispute<a href="#_ftn9" name="_ftnref9" title="">[9]</a>.
This fact possibly led the Sole Arbitrator to also highlight this circumstance when
assessing the behavior of the agent. However, the Sole Arbitrator further
stated that, even if the mandate would have provided for a remuneration in
favor of the agent (<i>quod non</i>), Article
415 CO would still not have been violated as the club failed to discharge the
burden of proof as to the existence of <i>bad
faith</i>, reinforcing with it that dual representation is only forbidden to
the extent the agent acts in bad faith<a href="#_ftn10" name="_ftnref10" title="">[10]</a>.</p>
<p class="MsoNormal" align="justify">This final remark of the Sole Arbitrator is crucial
as it evidences, in my view, that whether the player and the agent agreed upon a
remuneration, remains in the end irrelevant for the evaluation of a possible violation
of Article 415 CO. Indeed, pursuant to the CAS arbitrator’s interpretation of
the article, the agent can be remunerated twice, as it is the disregard of the
obligations inherent to the contract and in particular for the second hypothesis
acting in bad faith that determines compliance with Article 415 CO.</p>
<p class="MsoNormal" align="justify">To better illustrate the irrelevance of the “<i>double remuneration</i>” discussion, think
for a moment of a brokerage contract where there is no explicit reference to
the remuneration. <i>Does such a lacuna in
the contract imply that the brokerage is necessarily, pro bono</i>? The answer
is no, for as a general rule, mandates given in the context of professional
relationships are presumed to be lucrative (see Art. 394(3) CO). That is
precisely the case of football agents when they contract with players or clubs.
This circumstance renders the reference to a remuneration in the contract a
secondary element, or at least not an essential one. The former FIFA PAR (Ed.
2008<a href="#_ftn11" name="_ftnref11" title="">[11]</a>)
followed this <i>ratio legis</i> when explicitly
providing for a default remuneration of 3% of the players’ basic income where
the parties cannot agree on the remuneration. </p>
<p class="MsoNormal" align="justify">Beyond the specific CAS
awards, some decisions of the Swiss Tribunal Federal help getting the full
perspective on dual representation in the context of disputes subject to Swiss
law. Although these do not refer to football agents, the similarities that
exist with real estate and/or corporate brokers allow to derive important
conclusions that can be applied to football agents. </p>
<p class="MsoNormal" align="justify"><i>A
first decision</i> worth mentioning is no<a href="http://www.servat.unibe.ch/dfr/bger/141205_4A_214-2014.html%20and">.<b> 4A_214/2014
of 15 December 2014</b></a>. The case concerned a classic real estate intermediation
where the agent agreed a commission from both the seller and the buyer involved
in the transaction. The agent also failed to inform the seller of the existence
of a better buying offer from a third potential buyer. In this context, after
concluding the deal, the buyer refused to pay the agent, invoking Article 415
CO.</p>
<p class="MsoNormal" align="justify">This case is important because
it reveals the existence of two types of brokerage contracts under Swiss law
(i.e. “<i>courtage de negotiation</i>” and
the “<i>courtage d’indication”)</i>. Whereas in a <i>brokerage
of negotiation</i> the broker is entrusted by his client to negotiate the
conditions of the transaction, in a <i>brokerage
of indication</i>, the broker is simply
called to indicate the possibility to conclude a transaction, with no
negotiation duties involved. Furthermore, according to the doctrine cited
in the decision, both types of contract are treated differently under Article
415 CO.</p>
<p class="MsoNormal" align="justify"><i>In
casu</i>, the Federal Tribunal qualified the contracts signed by the agent with
the buyer and the seller as “<i>courtage de
negotiation</i>” as he was entrusted with conducting all aspects related to the
transaction. The agent was required to obtain the best possible conditions for
his clients (e.g. the best buying and selling price respectively) and this
circumstance directly generated an irremediable conflict of interest (i.e. the
negotiation was either benefitting the financial interests of seller or the
buyer) infringing the obligation of loyalty inherent to the brokerage contracts
with the parties.</p>
<p class="MsoNormal" align="justify">All in all, the Federal
Tribunal rejected the appeal submitted by the real estate agent and confirmed the
nullity of both contracts for violating Article 415 CO. The Federal Tribunal followed
a strict interpretation of Article 415 CO according to which “<i>no one can serve two masters</i>” and thus, dual
representation would only be possible (if so) in simple intermediations where
no negotiation from the broker is required<a href="#_ftn12" name="_ftnref12" title="">[12]</a>, in
other words in “<i>courtage d’indication”</i>. In addition, in this case
the agent also acted in bad faith for failing to disclose the existence of a
more favorable offer to the detriment of the seller.</p>
<p class="MsoNormal" align="justify">The main lesson that can be
learnt from this decision is that Article 415 CO must be interpreted restrictively
and that it has to be distinguished between those intermediation contracts that
imply an <i>active involvement of the agent</i>
(i.e. the agent is contractually required to negotiate the terms of a
transaction for the player and/or the club) and those contracts of
intermediation where <i>the agent is called
to simply indicate the possible opportunity for his client to conclude a deal</i>
with no other involvement in the transaction. In this last case, dual
representation could be allowed for there would be no conflict of interests,
and therefore, no infringement of the obligations under the brokerage contract.
The specific contractual clauses are therefore crucial as they ultimately
reveal the extent of the role assumed by the agent. </p>
<p class="MsoNormal" align="justify"><i>The
second </i>important<i> </i>decision by the SFT
is more recent, no.<b> <u><a href="http://www.servat.unibe.ch/dfr/bger/160304_4A_529-2015.html">4A_529/2015
of 4 March 2016</a></u></b>. The factual background of this dispute is extremely
complex. In brief, the case revolved around the selling and buying of the
shares of a company exploiting a luxurious Hotel located in Switzerland. The
seller and the broker entered into a <i>negotiation
brokerage</i> contract whereby the latter was entrusted to find a buyer of the
company against the payment of remuneration. The principal had to agree with
the final potential buyer. In the end, it was proved that the broker misled the
principal about the true identity of the final buyer (to whom the principal expressly
refused to sell), with whom the broker had also agreed remuneration. On the
basis of these facts, the principal refused to pay the broker.&nbsp; </p>
<p class="MsoNormal" align="justify">The Federal Tribunal confirmed
again that Article 415 CO is always interpreted strictly, and considered that
by allowing the <i>banned</i> buyer to indirectly
acquire the company, the broker acted <i>in
the interest of a third party against the obligation of loyalty</i>. What is most
significant about this decision is that the court delimitates very clearly the scope
of the obligation of loyalty. It is described as a double-edged sword, implying
on the one side: <i>a positive obligation</i>
consisting of actively safeguarding and defending the interest of the principal;
and on the other side: <i>a negative
obligation</i>, consisting of abstaining from any conduct that could harm the
interests of the client.&nbsp;&nbsp; </p>
<p class="MsoNormal" align="justify">In particular, the fact
that the principal had not objected to a previous e-mail sent by the broker
where he expressly indicated that the potential buyer was “<i>C or any company indicated by it</i>” was also irrelevant for the
principal could not expect in ‘<i>good faith</i>’
that the buyer would make use of this substitution prerogative in favor of the
real buyer. The arguments of the broker according to which it was not important
for the principal to know who the buyer was and that he suffered no damage,
were also dismissed.&nbsp; &nbsp;</p>
<p class="MsoNormal" align="justify">Finally, the argument of
the broker according to which the remuneration to be received from the buyer was
agreed after the transaction took place was also irrelevant in the eyes of the
court. </p>
<p class="MsoNormal" align="justify">With these cases in mind, when
applying the holding of the SFT above to football agents' professional relationships,
it follows that the scope of the obligation of loyalty will be significantly
wider for football agents entrusted with negotiations than for agents simply tasked
with identifying possible opportunities to close a deal. </p>
<p class="MsoNormal" align="justify">Likewise, in order to
determine the existence of a violation of the obligations assumed by the agent,
it will not be enough to demonstrate that there has been no threat to the
interests of the client or that the agent has not actively engaged in a conduct
against those interests. Indeed, a simple passive conduct with the potential of
jeopardizing the interests of the principal, such as failing to disclose
relevant information, can be sufficient to violate the obligation of loyalty
and deprive the agent from the right to be remunerated. </p>
<p class="MsoNormal" align="justify">To this effect, the correct
identification of the interest pursued by the client will ultimately determine
the infringement by the agent of his obligations under the representation
contract. In the end, the agent will only violate his obligation of loyalty as
long as his behavior damages the interests of his client. These interests will
vary depending on whether the principal is a football club or a player. If a
club is trying to transfer or recruit a player, the interests will in most
cases be of a financial nature. If instead, the principal is a football player
terminating or signing a contract with a club, he might have non-economic
interests (e.g. willing to play in a different championship, lack of
integration of the family in the country etc.). Furthermore, the moment in
which the remuneration is agreed is not relevant to establish the violation of
the obligation of loyalty.</p><p class="MsoNormal" align="justify"><br></p>
<p class="MsoNormal" align="justify">In conclusion, the contract
of representation and its clauses in combination with the particular
circumstances of each case will be fundamental to establish compliance with Article
415 CO when multiple representation takes place.&nbsp;&nbsp; Football agents pretending to be remunerated
by both contracting parties simultaneously without risking to violate their
obligations must either enter into simple brokerage contracts with no negotiation
attributions, or, when acting through a negotiation brokerage, always inform
all parties in complete transparency.&nbsp; </p>
<p class="MsoNormal" align="justify">&nbsp;</p><p align="justify"><br clear="all">
</p><hr align="justify" size="1" width="33%">
<p id="ftn1" align="justify">
</p><p class="MsoFootnoteText" align="justify"><a href="#_ftnref1" name="_ftn1" title="">[1]</a> See Article 19.8
FIFA PAR. </p>
<p align="justify"></p>
<p id="ftn2" align="justify">
</p><p align="justify"><a href="#_ftnref2" name="_ftn2" title=""><i><b>[2]</b></i></a><i> “Definition of an intermediary </i></p>
<p align="justify"><i>A natural or legal person
who, for a fee or free of charge, <u>represents players and/or club</u>s in
negotiations with a view to concluding an employment contract or represents
clubs in negotiations with a view to concluding a transfer agreement.”
[Emphasis added]</i></p>
<p align="justify"></p>
<p id="ftn3" align="justify">
</p><p class="MsoFootnoteText" align="justify"><a href="#_ftnref3" name="_ftn3" title="">[3]</a> Only the FFF (France),
the RFU (RUSSIA), the BFU (Bulgaria) the JFA (Japan) have explicitly adopted
stricter rules prohibiting any conflict of interest. See Comparative Table of “<i>The FIFA Regulations on Working with
Intermediaries Implementation at a national level</i>” (Ed. Michele Colucci).</p>
<p align="justify"></p>
<p id="ftn4" align="justify">
</p><p class="MsoFootnoteText" align="justify"><a href="#_ftnref4" name="_ftn4" title="">[4]</a> E.g. Arbitrage
<a href="http://jurisprudence.tas-cas.org/Shared%20Documents/1310.pdf">TAS
2007/O/1310</a> Bruno Heiderscheid c. Franck Ribéry.</p>
<p align="justify"></p>
<p id="ftn5" align="justify">
</p><p class="MsoFootnoteText" align="justify"><a href="#_ftnref5" name="_ftn5" title="">[5]</a> See article R45 of the
CAS Code (ed. 2017).</p>
<p align="justify"></p>
<p id="ftn6" align="justify">
</p><p class="MsoFootnoteText" align="justify"><a href="#_ftnref6" name="_ftn6" title="">[6]</a> Art. 415. <i>III. Déchéance:</i></p>
<p align="justify"><i>“Le
courtier perd son droit au salaire et au remboursement de ses dépenses, s'il
agit dans l'intérêt du tiers contractant <b><u>au
mépris de ses obligations</u></b>, ou s'il se fait promettre par lui une
rémunération dans des circonstances où les règles de la bonne foi s'y
opposaient.”</i></p>
<p class="MsoFootnoteText" align="justify"><a href="https://www.admin.ch/opc/fr/classified-compilation/19110009/index.html">https://www.admin.ch/opc/fr/classified-compilation/19110009/index.html</a> </p>
<p align="justify"></p>
<p id="ftn7" align="justify">
</p><p class="MsoNormal" align="justify"><a href="#_ftnref7" name="_ftn7" title="">[7]</a> See. Decision of the SFT 131 III 511 para. 3.2.2 of&nbsp; <a href="http://relevancy.bger.ch/php/clir/http/index.php?highlight_docid=atf%3A%2F%2F131-III-511%3Ade&amp;lang=de&amp;type=show_document">http://relevancy.bger.ch/php/clir/http/index.php?highlight_docid=atf%3A%2F%2F131-III-511%3Ade&amp;lang=de&amp;type=show_document</a>
</p>
<p align="justify"></p>
<p id="ftn8" align="justify">
</p><p class="MsoFootnoteText" align="justify"><a href="#_ftnref8" name="_ftn8" title="">[8]</a> See para. 118.</p>
<p align="justify"></p>
<p id="ftn9" align="justify">
</p><p class="MsoFootnoteText" align="justify"><a href="#_ftnref9" name="_ftn9" title="">[9]</a> E.g. <b><a href="http://resources.fifa.com/mm/document/affederation/administration/agentdispute/1121835.pdf">Decision
of the Single Judge of the PSC of 12 January 2012</a>:</b> “<i>12. In view of the above, the Single Judge
formed the view that, although the Claimant appears to have represented the
Respondent and the player in the same transaction, the documentary evidence
contained in the file clearly demonstrates that the Claimant could not have
possibly been remunerated twice for his services. Consequently, and in
accordance with the general principles of bona fide and pacta sunt servanda the
Single Judge decided that the Respondent must fulfill the obligation it
voluntarily entered into with the Claimant by means of the representation
agreement concluded between the parties, and therefore, the Respondent must pay
the Claimant for the services he rendered in connection with the transfer of
the player to the Respondent.” </i></p>
<p align="justify"></p>
<p id="ftn10" align="justify">
</p><p class="MsoFootnoteText" align="justify"><a href="#_ftnref10" name="_ftn10" title="">[10]</a> See also para. 118.</p>
<p align="justify"></p>
<p id="ftn11" align="justify">
</p><p class="MsoFootnoteText" align="justify"><a href="#_ftnref11" name="_ftn11" title="">[11]</a> See i.c. article 20 para.
4 FIFA PAR (ed. 2008).</p>
<p align="justify"></p>
<p id="ftn12" align="justify">
</p><p class="MsoFootnoteText" align="justify"><a href="#_ftnref12" name="_ftn12" title="">[12]</a> See para. 1.1.3 of the
SFT decision. An example of a <i>courtage d’indication</i> would be the
brokerage of insurances, where the broker, acting for the policy-holder, is
paid instead, by the insurance company.</p>
<p></p>
<p></p>
http://www.asser.nl/SportsLaw/Blog/post/the-limits-to-multiple-representation-by-football-intermediaries-under-fifa-rules-and-swiss-law-by-josep-f-vandellos-alamilla
http://www.asser.nl/SportsLaw/Blog/post/the-limits-to-multiple-representation-by-football-intermediaries-under-fifa-rules-and-swiss-law-by-josep-f-vandellos-alamilla#commenthttp://www.asser.nl/SportsLaw/Blog/post.aspx?id=133279fe-c74e-4b36-9f96-b184baad2997Wed, 11 Oct 2017 18:10:00 +0100BlogInternational Sports Law CasesInternational Sports Law CommentariesInternational Sports Law PublicationsAntoine Duvalhttp://www.asser.nl/SportsLaw/Blog/pingback.axdhttp://www.asser.nl/SportsLaw/Blog/post.aspx?id=133279fe-c74e-4b36-9f96-b184baad29971http://www.asser.nl/SportsLaw/Blog/trackback.axd?id=133279fe-c74e-4b36-9f96-b184baad2997http://www.asser.nl/SportsLaw/Blog/post/the-limits-to-multiple-representation-by-football-intermediaries-under-fifa-rules-and-swiss-law-by-josep-f-vandellos-alamilla#commenthttp://www.asser.nl/SportsLaw/Blog/syndication.axd?post=133279fe-c74e-4b36-9f96-b184baad2997The Evolution of UEFA’s Financial Fair Play Rules – Part 3: Past reforms and uncertain future. By Christopher Flanagan<p align="justify"><a href="http://www.asser.nl/SportsLaw/Blog/post/the-evolution-of-uefa-s-financial-fair-play-rules-part-2-the-legal-challenges-by-christopher-flanagan">Part Two</a> of this series looked at the
legal challenges FFP has faced in the five years since the controversial ‘break
even’ requirements were incorporated.
Those challenges to FFP’s legality have been ineffective in defeating
the rules altogether; however, there have been iterative changes during FFP’s
lifetime. Those changes are marked by
greater procedural sophistication, and a move towards the liberalisation of
equity input by owners in certain circumstances. In light of recent statements <a href="https://www.theguardian.com/football/2017/jul/09/uefa-ceferin-smaller-leagues-talk-wage-cap">from UEFA President Aleksander Čeferin</a>, it is possible that the financial regulation of European football
will be subject to yet further change. <br></p><p class="BodyA" align="justify">
<br>
</p>
<p class="BodyA" align="justify"><b>FFP from 2010 to 2015</b>&nbsp;
</p><p class="BodyA" align="justify">FFP was integrated into UEFA’s
licensing requirements in the <a href="http://www.uefa.com/MultimediaFiles/Download/Tech/uefaorg/General/01/50/09/12/1500912_DOWNLOAD.pdf">Club Licensing and Financial Fair Play Regulations Edition
2010</a>.&nbsp; In the 2010 Edition, implementation of FFP
was to be overseen by the UEFA Club Financial
Control Panel. Disciplinary action was carried out by
the UEFA Control and Disciplinary Body, whose decisions could be appealed to
the UEFA Appeals Board.</p>
<p class="BodyA" align="justify">In the <a href="https://www.uefa.com/MultimediaFiles/Download/Tech/uefaorg/General/01/80/54/10/1805410_DOWNLOAD.pdf">Club Licensing and Financial Fair Play Regulations Edition
2012</a>, the oversight
and disciplinary procedure of FFP was amended. The functions of the Club Financial Control Panel, Control and Disciplinary Body, and Appeals Board were replaced
with a two-tier Club Financial Control Body (CFCB). The two chambers of the CFCB are the
Investigatory Chamber, which actively monitors FFP compliance; and the
Adjudicatory Chamber, which levies sanctions for non-compliance. </p>
<p class="BodyA" align="justify">Under Article 53.1 of the 2012
Edition rules, the CFCB “<i>carries out its duties as specified in the present regulations
and the Procedural rules governing the UEFA Club Financial Control Body</i>”
(the <b>Procedural Rules</b>). The bespoke Procedural Rules establish a
framework for the composition of the CFCB, the decision making processes of
both the Investigatory and Adjudicatory Chambers, and the rules applicable to
the whole proceedings. Like the Club Licensing and FFP Regulations, the
Procedural Rules have gone through iterative changes (<a href="http://www.uefa.com/MultimediaFiles/Download/Tech/uefaorg/General/01/85/85/25/1858525_DOWNLOAD.pdf">2014</a>, and <a href="http://www.uefa.com/MultimediaFiles/Download/Tech/uefaorg/General/02/28/72/46/2287246_DOWNLOAD.pdf">2015</a> editions).</p>
<p class="BodyA" align="justify">The Procedural Rules are a
welcome development to FFP, ensuring the independence of the CFCB (Articles 6
and 7); bestowing broad investigatory powers upon the Investigatory Chamber
(Article 13); and setting clear parameters for disciplinary action and process,
including setting out potential disciplinary measures (Article 29). Overall, the
Procedural Rules increase the legal sophistication of the end-to-end FFP
process, and in doing so reduce the risk of irrational or arbitrary
outcomes.&nbsp; This protects clubs and UEFA;
clubs who are in breach of FFP have clear guidance on the process that will be
followed; clubs who adhere to FFP are reassured that those clubs who breach the
rules will be put through a sophisticated investigation and (if necessary)
disciplinary process (and additionally, pursuant to Article 22, where third
party clubs and member associations are affected and have a legitimate interest
in joining proceedings before the Adjudicatory Chamber, may do so); and UEFA,
in having a clear and detailed rules governing procedure, helps to insulate FFP
from legal challenge.</p>
<p class="BodyA" align="justify">(By way of aside, in light of
the changes to the procedure governing FFP sanctions, it is noteworthy that
Bursaspor, in <a href="https://www.uefa.com/MultimediaFiles/Download/OfficialDocument/uefaorg/CASdecisions/02/44/19/37/2441937_DOWNLOAD.PDF">CAS 2014/A/3870 Bursaspor Kulübü Derneği v. Union des
Associations Européennes de Football</a>, argued that Control and Disciplinary Body and
Appeals Board were “<i>not professional on financial subjects</i>”, although
the Turkish club was unsuccessful in its appeal, and UEFA’s rebuttal was to
highlight that the Club Financial Control Panel was made up of “f<i>inancial
and legal experts</i>” and that the creation of the CFCB was “<i>principally
motivated by a desire to streamline the process</i>”.) </p>
<p class="BodyA" align="justify">Amongst the Procedural Rules,
Article 33 stipulates that decisions of the Adjudicatory Chamber are to be
published (subject to redaction to protect confidential information or personal
data), which has the effect not just of increasing the transparency of UEFA’s
decision making, but also of increasing the transparency of the financial
affairs of European club football.</p><p class="BodyA" align="justify"><br></p>
<p class="BodyA" align="justify"><b>Settlement Agreements</b></p>
<p class="BodyA" align="justify">One of the more dramatic
changes implemented by the Procedural Rules was the implementation of
‘Settlement Agreements’, which are “<a href="http://www.uefa.com/MultimediaFiles/Download/uefaorg/FinancialFairPlay/02/32/60/65/2326065_DOWNLOAD.pdf">aimed at ensuring that clubs in breach of the break-even
requirement become compliant within a certain timeframe and are designed to be
effective, equitable and dissuasive.</a>” </p>
<p class="BodyA" align="justify">Settlement Agreements have
been described as “<a href="http://www.espn.co.uk/football/blog/marcotti-musings/62/post/3171692/what-neymar-world-record-move-means-for-barcelona-psg-uefa-ffp-more">basically a plea bargain</a>”. Redolent of the settlement procedures in many
competition law or white collar crime regimes, Settlement Agreements are
consensual agreements entered into between a party who has breached FFP and the
CFCB, which avoid the need for a breach to be referred to the Adjudicatory
Chamber (Article 15.1).&nbsp;&nbsp; Settlement
Agreements have been viewed by the CAS as effectively giving clubs a ‘second
chance’ to comply with FFP (<i>CAS 2016/A/4692 Kardemir Karabükspor v. UEFA</i>),
albeit with more stringent conditions applied.</p>
<p class="BodyA" align="justify">Settlement Agreements may
include sanctions and timeframes for compliance (Article 15.2) and are
monitored by the CFCB Chief Investigator (Article 15.4). If there is a breach
of a settlement agreement, the matter is then referred to the Adjudicators
Chamber.</p><p class="BodyA" align="justify"><br></p>
<p class="BodyA" align="justify"><b>FFP from 2015</b><b></b></p>
<p class="BodyA" align="justify">The next major changes to FFP
were implemented in the <a href="http://www.uefa.com/MultimediaFiles/Download/Tech/uefaorg/General/02/26/77/91/2267791_DOWNLOAD.pdf">Club Licensing and Financial Fair Play Regulations Edition
2015</a>.</p>
<p class="BodyA" align="justify"><b><i>Introduction of Voluntary Agreements</i></b>&nbsp;
</p><p class="BodyA" align="justify">In contrast to the <i>ex post</i>
compliance approach of Settlement Agreements, Voluntary Agreements are an <i>ex
ante</i> mechanism for clubs to derogate from the normal FFP standards, with
the ultimate aim of complying with the break-even requirement. Voluntary Agreements
are defined as being “<i>a structured set of obligations which are individually
tailored to the situation of the club, break-even targets defined as annual and
aggregate break-even results for each reporting period covered by the
agreement, and any other obligations as agreed with the UEFA Club Financial
Control Body investigatory chamber</i>” (Edition 2015, Annex XII A.5). They can last for up to four reporting periods (Annex XII A.3). </p>
<p class="BodyA" align="justify">In order to enter into a
Voluntary Agreement, a club must adhere to certain procedural requirements.
These include submitting a long-term business plan “<i>based on reasonable and
conservative assumptions</i>” (Annex XII B.2(a)).</p>
<p class="BodyA" align="justify">On the face of it, the concept
of the Voluntary Agreements–allowing clubs with new owners to incur debts on
the promise of future FFP compliance–sounds like a recipe for sort of financial
peril FFP was created to avoid.&nbsp; However,
in order to be allowed to enter into a Voluntary Agreement, there must be put
in place “<i>an irrevocable commitment(s) by an equity participant(s) and/or
related party(ies) to make contributions for an amount at least equal to the
aggregate future break-even deficits for all the reporting periods covered by
the voluntary agreement</i>” (Annex XII B.2(c)). </p>
<p class="BodyA" align="justify"><b><i>Break Even Limit Increase</i></b></p>
<p class="BodyA" align="justify">Another significant change
implemented by the <a href="http://www.uefa.com/MultimediaFiles/Download/Tech/uefaorg/General/02/26/77/91/2267791_DOWNLOAD.pdf">Club Licensing and Financial Fair Play Regulations Edition
2015</a> was a variation
to the quantum of the break even limits in certain circumstances. The limits
were <a href="http://www.uefa.com/community/news/newsid=2064391.html">increased</a> from €5m to €45m for
assessment periods 2013/14 and 2014/15, and €30m for
assessment periods 2015/16, 2016/17 and 2017/18&nbsp;
“<i>if it is entirely covered by a direct contribution/payment from the
club owner(s) or a related party</i>” (Article 61.2).</p>
<p class="BodyA" align="justify">This balance between
short-term losses, guaranteed in the event of financial failure (per the
Voluntary Agreement process) or offset by owner input, against long term
sustainability are superficially congruent with the objectives identified by
UEFA for its licensing regime, which include “<i>to introduce more discipline
and rationality in club football finances; to encourage clubs to operate on the
basis of their own revenues; to encourage responsible spending for the
long-term benefit of football; and to protect the long-term viability and
sustainability of European club football</i>” (Article 2 (c)-(f)).&nbsp; But this takes a somewhat narrow view of the
impact of spending in football. A club’s spending affects not just a buying and
selling club in a market transaction for a player’s registration, but affects
the overall market in football players.</p>
<p class="BodyA" align="justify">Inflation in the market for
player registrations far outstrips inflation across the broader economy (by one
estimate, inflation in football transfer fees runs <a href="https://tomkinstimes.com/2017/07/shock-transfers-now-cost-more-plus-top-100-signings-after-inflation/">ten times higher</a> than inflation in the “normal” economy – and those figure were
calculated before Paris Saint Germain doubled the record transfer fee with the
purchase of Neymar in the summer of 2017. Player wage growth runs at <a href="http://www.uefa.com/MultimediaFiles/Download/OfficialDocument/uefaorg/Finance/02/42/27/91/2422791_DOWNLOAD.pdf">over 10% per annum</a>. Voluntary Agreements and increased owner
investment may contribute to this vertiginous inflation. This runs in contrast
to some of UEFA’s messaging around FFP. For example, it has previously been <a href="http://www.uefa.com/insideuefa/protecting-the-game/club-licensing-and-financial-fair-play/?redirectFromOrg=true">stated</a> that FFP was intended to “<i>decrease pressure on salaries and
transfer fees and limit inflationary effect</i>”. </p>
<p class="BodyA" align="justify">Of course, it should be borne
in mind that there is nothing inherently wrong with inflation where it is
sustainable; but when considered in an environment where capital is accruing to
the wealthy elite (top 15 European clubs) at a quicker rate than the rest of
the market (see <a href="http://www.asser.nl/SportsLaw/Blog/post/uefa-s-financial-fair-play-regulations-and-the-rise-of-football-s-1">UEFA’s Financial
Fair Play Regulations and the Rise of Football’s 1%</a> by van Maren for further analysis), there is a
risk of bifurcation of the financial capabilities of football clubs, with
inflation marginalising the non-elite.&nbsp;
European clubs have seen revenue growth at over 9% per annum on <a href="http://www.uefa.com/MultimediaFiles/Download/OfficialDocument/uefaorg/Finance/02/42/27/91/2422791_DOWNLOAD.pdf">UEFA’s figures</a>, although since 2009, the average English Premier League club has
added “<a href="http://www.uefa.com/MultimediaFiles/Download/OfficialDocument/uefaorg/Finance/02/42/27/91/2422791_DOWNLOAD.pdf">five times more revenue than the average Italian Serie A or
French Ligue Un club</a>”.
Inflation, if not intrinsically problematic, certainly has the potential to
cause problems; and UEFA, in administering and approving Voluntary Agreements,
and in weakening its stance on owners offsetting losses, should consider the
impact on inflation and stability. Voluntary Agreements and financial input by
owners are potentially gateways to the elite level; however, this should not be
at the expense of those who do not have wealthy owners or pre-existing wealth.</p>
<p class="BodyA" align="justify">Perhaps more significantly,
there is a normative dimension to the introduction of Voluntary Agreements and
the relaxation of financial input from benefactors. The message behind FFP was
one of “<i>revolutionising European football</i>”, with then President of UEFA
Michel Platini <a href="https://www.theguardian.com/football/2012/aug/31/michel-platini-financial-fair-play">saying</a> that UEFA would “<i>never</i> [be] <i>going back on this</i>.”
Quite conversely, the changes brought about by the 2015 Edition of FFP were
welcomed with a message of FFP being “<a href="http://www.bbc.co.uk/sport/football/32784375">eased</a>”. This is disappointing because, on <a href="http://www.uefa.com/MultimediaFiles/Download/OfficialDocument/uefaorg/Finance/02/42/27/91/2422791_DOWNLOAD.pdf">UEFA’s own
figures</a>, FFP has had
a considerable positive impact on the European football financial landscape. On
one view, allowing equity input from owners is a pro-competitive encouragement
of exogenous investment; on another, it is rowing back from a positive and
successful policy initiative at the expense of those not fortunate enough to
have a benefactor owner.</p><p class="BodyA" align="justify"><br></p><p class="BodyA" align="justify"><b>The impact of FFP</b><b></b></p>
<p class="BodyA" align="justify">In defence of its loosening of
the restriction on loss-making, UEFA would doubtless point to the positive
impact the FFP has had to date,<a href="#_ftn1" name="_ftnref1" title=""><sup><sup>[1]</sup></sup></a> which, perhaps,
creates financial latitude that once did not exist.</p>
<p class="BodyA" align="justify">As a part of FFP, the clubs
under UEFA’s direct jurisdiction report standardised, audited, financial
information. UEFA publishes annual benchmarking reports, which draw upon the
information clubs submit. Since the introduction of FFP, there has been a
general positive trend in European clubs’ finances.</p>
<p class="BodyA" align="justify">For example, UEFA’s 7th
Benchmarking Report, covering the financial year 2014, showed wage growth to
have slowed to its “<a href="http://www.uefa.com/MultimediaFiles/Download/Tech/uefaorg/General/02/29/65/84/2296584_DOWNLOAD.pdf">lowest rate in recent history</a>” at 3%. Overdue payables (essentially debts that
clubs owe but have not paid on time) had reduced by 91%. The most recent report
published by UEFA, its eight <a href="http://www.uefa.com/MultimediaFiles/Download/OfficialDocument/uefaorg/Finance/02/42/27/91/2422791_DOWNLOAD.pdf">Club Licensing Benchmarking Report</a>, covering the financial year 2015, indicates that
clubs “<i>have generated underlying operating profits of </i><i>€1.5bn in the last two years, compared with losses of </i><i>€700m in the two years before the introduction of </i>[FFP]”; whereas “<i>Combined bottom-line losses have decreased by
81% since the introduction of </i>[FFP]”.</p>
<p class="BodyA" align="justify">Of course, there are
methodological problems in ascribing the improvement in European clubs’
finances exclusively to FFP when in reality there are a combination of factors
at play. However, what we can comfortably say is that there is an evident <i>correlation</i>
between FFP and the stabilisation of the football financial landscape.</p>
<p class="BodyA" align="justify">There is also a second-order
effect of FFP at play. UEFA, in its position as the game’s regulator, in
introducing FFP, has had a hegemonic influence on the governance of the game at
national level.&nbsp; For example, in England,
domestic iterations of FFP have been instituted in the Football League, and the
Premier League has introduced its own Short Term Cost Control Measures. </p>
<p class="BodyA" align="justify">Thus, by setting the tone of
sustainability expectations, UEFA has influenced the financial stability of
clubs outside of its jurisdiction. This is highlighted neatly in the following
passage from UEFA’s <a href="http://www.uefa.com/MultimediaFiles/Download/OfficialDocument/uefaorg/Finance/02/42/27/91/2422791_DOWNLOAD.pdf">eight Benchmarking Report</a>:</p>
<p class="BodyA" align="justify">“<i>The centrepiece of
financial fair play, the break-even rule, may not directly address small and
medium-sized clubs with costs and incomes below </i><i>€5m, but financial fair play has other direct and indirect impacts on
these clubs. Direct in that UEFA and the Club Financial Control Body pass their
eyes over detailed financial data from all clubs competing in UEFA competitions
and in particular take careful, regular note of all overdue payables. And
indirect in that financial fair play has resulted in a significantly higher
level of scrutiny of club finances and the actions of club owners and
directors. In addition, some countries, such as Cyprus, have introduced their
own versions of financial fair play, tailored to their clubs and the scale of
their financial activities</i>.”&nbsp;
</p><p class="BodyA" align="justify">So, whilst UEFA can
legitimately point to the more secure position across the financial landscape
as a good reason that Voluntary Agreements or wider economic input from owners
will do no harm, it should continue to reflect on the message this loosening of
FFP may send to the wider football market.</p><p class="BodyA" align="justify"><br></p>
<p class="BodyA" align="justify"><b>FFP Exemptions</b></p>
<p class="BodyA" align="justify">One area of change for which
UEFA should be applauded is in its use of certain exemptions from the FFP
‘break even’ calculation. These include areas such as infrastructure and youth
football, both essential to the game’s long-term sustainability. By exempting
these areas from the break even calculation, clubs’ owners are incentivised to
invest (by equity rather than debt) in the game’s future, without an impact on
short-term competitiveness. </p>
<p class="BodyA" align="justify">More recently (from 2015),
UEFA has moved to exclude expenditure on women’s football from the break-even
calculation (Annex X C(i). Again, UEFA should be praised for taking positive
steps to encourage growth across less wealthy areas of the game.</p><p class="BodyA" align="justify"><br></p>
<p class="BodyA" align="justify"><b>The Future of FFP after
Neymar</b><b></b></p>
<p class="BodyA" align="justify">Over the summer of 2017,
public interest in FFP has reignited. The rules are now becoming synonymous
with Neymar and his new club, Paris Saint Germain, after the Brazilian player’s
reported €222m release clause was activated, doubling the
world record fee for a player transfer.&nbsp;&nbsp;
This move, followed by French player Kylian Mbappe joining Paris Saint
Germain from Monaco for similarly large fee, has <a href="http://www.espn.co.uk/football/paris-saint-germain/story/3197893/psg-and-neymar-peeing-in-the-swimming-pool-la-liga-president-javier-tebas">upset some in the game</a>.</p>
<p class="BodyA" align="justify">These events pose a
significant problem for UEFA. It is not yet known whether PSG are in breach of
FFP (and, of course, it is conceivable that they have sufficient financial
capabilities to fund the purchases without any breach of the rules); however,
the transactions have raised questions, including La Liga President Javier Tebas <a href="http://www.espn.co.uk/football/soccer-transfers/story/3170507/la-liga-chief-vows-to-complain-to-uefa-and-eu-over-psgs-neymar-deal">stating</a> that he believed PSG were guilty of “<i>infringing on UEFA
regulations, financial fair play and EU laws”</i>, and Arsenal manager Arsène
Wenger <a href="https://www.theguardian.com/football/2017/sep/07/arsene-wenger-calls-end-ffp-rules-u-turn-arsenal">saying</a> that “<i>it looks like we have created rules that cannot be
respected…there are too many legal ways to get around it.</i>”&nbsp;
</p><p class="BodyA" align="justify">The public grievances around
FFP precipitated by PSG’s spending do, to an extent, seem to conflate simply
spending large sums of money with breaching FFP. The rules do not prohibit
spending large sums on transfers or otherwise; rather, they limit how much debt
can be incurred by a club, assessed over a three year rolling period, with only
limited equity input from an owner. The rules were not designed to prevent a €222m
transfer <i>per se</i> (with the fee amortised across the length of the
contract period, as is standard practice in the football industry); rather,
they were designed to ensure that any such spending was sustainable, and did
not put clubs at risk. </p>
<p class="BodyA" align="justify">However, FFP is a reactive,
not a proactive tool. Clubs report spending after the event; they are not
required to seek permission from UEFA to make a capital investment. This<i> ex
post </i>approach does perhaps reveal a flaw in managing any egregious
short-term infractions that should arise, the impact of which will be felt by
other clubs before UEFA, through the CFCB, can have its say. </p>
<p class="BodyA" align="justify">The broader problem associated
with PSG’s spending is one of opacity. PSG is owned by Oryx Qatar Sports
Investments, which is an investment vehicle for the state of Qatar. There were
contemporary (unconfirmed) <a href="https://www.theguardian.com/football/2017/aug/02/psg-200m-neymar-barcelona-financial-fair-play">reports</a> that the deal would be structured to take place off of PSG’s
accounting books, with Neymar being paid the value of his release clause
directly for agreeing to become an ambassador to the Qatar World Cup, so that
he could in turn pay his own release clause.&nbsp;
If true, this would notionally take the release clause fee off of PSG’s
books, but would almost certainly qualify as a related party transaction with
the meaning of FFP’s Annex X F and thus remain examinable by the CFCB. Similarly,
it was reported that PSG’s loan-come-purchase of Kylian Mbappe was “<a href="http://www.telegraph.co.uk/football/2017/09/01/psg-managed-sign-kylian-mbappe-loan-year-without-having-pay/">complex</a>”. While complicated transfer arrangements are to be expected in a
game that is going through increasing commercial sophistication, there are
evidently some suspicions that PSG are attempting to circumvent FFP (or, more
colourfully, ‘<a href="http://www.independent.co.uk/sport/football/european/neymar-psg-man-city-javier-tebas-transfers-ffp-uefa-soccerex-swimming-pool-a7932166.html">peeing in the pool</a>’).</p>
<p class="BodyA" align="justify">However, UEFA anticipated
clubs employing ‘creative’ tactics to superficially comply with FFP, and gave
the CFCB jurisdiction to consider “<i>at all times…the overall objectives of
these regulations, in particular to defeat any attempt to circumvent these
objectives</i>” (Article 72.1). (At this stage, one can only speculate as to
what, if any, FFP objectives PSG may have breached, but the CFCB will surely consider
Article 2.2 (a) and (c) - (f)).</p>
<p class="BodyA" align="justify">UEFA has <a href="http://www.uefa.com/insideuefa/about-uefa/news/newsid=2497671.html">publicly stated</a> that it is investigating PSG’s FFP compliance, saying “<i>The
investigation will focus on the compliance of the club with the break-even
requirement, particularly in light of its recent transfer activity</i>”. Of
course, this should not be particularly surprising given the CFCB annually
examines the finances of each club that enters into UEFA competitions under the
standard FFP procedure, but it will be interesting to observe how CFCB’s
investigation progresses, and, if PSG is found to have breached FFP in letter
or in spirit, what punishment is meted out to PSG.&nbsp; </p>
<p class="BodyA" align="justify">Whether PSG’s aggressive
spending was emboldened by UEFA’s weakening of the more restrictive elements of
FFP will remain unknown.&nbsp; Similarly, one
can only speculate as to whether the dilution of FFP, through changes such as
the implementation of Settlement Agreements and Voluntary Agreements, came
about as a result of legal challenges already brought and defended by UEFA; or
whether UEFA is insulating itself from further legal challenges; or whether
UEFA is simply altering the rules for the good of the game. As detailed in Part
One of this series, the legality of FFP will rest on its proportionality. These
changes have moved FFP towards a more flexible, and arguably more proportionate, proposition; but, given the public exposure that PSG’s spending has
precipitated,UEFA will surely wish to ensure that FFP is not seen as a paper
tiger.</p>
<p class="BodyA" align="justify">The matter is on UEFA’s
agenda. Even before the events involving PSG in the summer of 2017, incoming
UEFA president, Aleksander Čeferin, <a href="https://www.theguardian.com/football/2017/jul/09/uefa-ceferin-smaller-leagues-talk-wage-cap">spoke about the possibility of a fixed wage cap</a> and <a href="http://www.apple.com">closing the gap</a> between the game’s haves and have nots. Such
changes would certainly make FFP more congruent with its name. FFP is not about
being ‘fair’ in the sense of being egalitarian or introducing a level playing
field. It is a gentle brake applied to the rate of growth in the game, aimed
predominantly at reducing long-term loss making and insolvency. Perhaps the
rules might have been less controversial from the outset, and might not have
been a mechanism for the frustration ventilated by sum following PSG’s purchase
of Neymar and Mbappe, if instead of being called FFP, the rules were called
‘financial management rules’, and absolved themselves from the pretence of
‘fairness’.</p>
<p class="BodyA" align="justify">Alternatively, UEFA could
revisit FFP, implementing a genuinely egalitarian set of rules –&nbsp;a hard
salary cap, a luxury tax, the abolition of the transfer market, or some
combination of those things and others. This would, however, undoubtedly
engender its own set of legal challenges, as we have seen with FFP.&nbsp;
</p><p class="BodyA" align="justify">Whilst the challenges to
various aspects of FFP have been largely ineffective in defeating FFP (see for
example <a href="http://www.uefa.com/MultimediaFiles/Download/uefaorg/CASdecisions/02/47/24/45/2472445_DOWNLOAD.pdf">CAS 2016/A/4692</a> Kardemir Karabükspor v. UEFA; <a href="https://www.uefa.com/MultimediaFiles/Download/uefaorg/CASdecisions/02/42/66/95/2426695_DOWNLOAD.pdf">CAS 2016/A/4492</a> Galatasary v. UEFA; <a href="https://www.uefa.com/MultimediaFiles/Download/OfficialDocument/uefaorg/CASdecisions/02/44/19/37/2441937_DOWNLOAD.PDF">CAS 2014/A/3870</a> Bursaspor Kulübü Derneği v. UEFA; <a href="https://www.uefa.com/MultimediaFiles/Download/OfficialDocument/uefaorg/CASdecisions/02/44/19/31/2441931_DOWNLOAD.pdf">CAS 2014/A/3533</a> Football Club Metallurg v. UEFA; <a href="http://www.uefa.com/MultimediaFiles/Download/uefaorg/CASdecisions/02/47/24/28/2472428_DOWNLOAD.pdf">CAS 2013/A/3067</a> Málaga CF SAD v. UEFA; <a href="https://jurisprudence.tas-cas.org/Shared%2520Documents/2824.pdf">CAS 2012/A/2824</a> Beşiktaş JK v UEFA; <a href="https://jurisprudence.tas-cas.org/Shared%2520Documents/2821.pdf">CAS 2012/A/2821</a> Bursaspor Kulübü Dernegi v. UEFA; <a href="http://www.tas-cas.org/fileadmin/user_upload/AWARD20FINAL20270220internet.pdf">CAS 2012/A/2702</a> Györi ETO v. UEFA ), the rules have, against the backdrop
of repeated disputes about their legality, iteratively changed, including a
move towards greater liberalisation in respect of equity input into clubs by
owners.&nbsp; </p>
<p class="BodyA" align="justify">And so UEFA finds itself at a
crossroads. FFP, bombarded with legal challenges (which it has to date ridden)
has gradually developed and liberalised as financial stability in European
football has improved. Now, with the transfer market having escalated, the
efficacy of the rules has come into question. UEFA must decide on the path it wishes
to take; whether to liberate the market altogether,&nbsp; whether to institute a truly ‘fair’ system,
or whether to continue on FFP’s current centrist ground. Aleksander Čeferin, a
lawyer by extraction, is certain to face a legal and political struggle in whichever
direction he turns.</p><hr align="left" size="1" width="33%">
<p id="ftn1">
</p><p class="Footnote"><a href="#_ftnref1" name="_ftn1" title=""><sup><sup>[1]</sup></sup></a> For further discussion on the efficacy of FFP, see
Neil Dunbar (2015) "The union of European football association’s club licensing and financial fair play regulations -
are they working?" ISSN 1836-1129 <a href="http://epublications.bond.edu.au/slej/27">http://epublications.bond.edu.au/slej/27</a></p>
<p></p>
<p></p>
http://www.asser.nl/SportsLaw/Blog/post/the-evolution-of-uefa-s-financial-fair-play-rules-part-3-past-reforms-and-uncertain-future-by-christopher-flanagan
http://www.asser.nl/SportsLaw/Blog/post/the-evolution-of-uefa-s-financial-fair-play-rules-part-3-past-reforms-and-uncertain-future-by-christopher-flanagan#commenthttp://www.asser.nl/SportsLaw/Blog/post.aspx?id=5a91a817-fa6b-4cca-9d88-e531bd04704aWed, 04 Oct 2017 13:10:00 +0100BlogInternational Sports Law CommentariesAntoine Duvalhttp://www.asser.nl/SportsLaw/Blog/pingback.axdhttp://www.asser.nl/SportsLaw/Blog/post.aspx?id=5a91a817-fa6b-4cca-9d88-e531bd04704a0http://www.asser.nl/SportsLaw/Blog/trackback.axd?id=5a91a817-fa6b-4cca-9d88-e531bd04704ahttp://www.asser.nl/SportsLaw/Blog/post/the-evolution-of-uefa-s-financial-fair-play-rules-part-3-past-reforms-and-uncertain-future-by-christopher-flanagan#commenthttp://www.asser.nl/SportsLaw/Blog/syndication.axd?post=5a91a817-fa6b-4cca-9d88-e531bd04704a